Final Phase II Technical Report

THERMOACOUSTIC LIQUEFACTION OF COAL MINE METHANE

TO PRODUCE LNG FOR HEAVY VEHICLE APPLICATIONS

Prepared for

U. S. DEPARTMENT OF ENERGY

MORGANTOWN ENERGY TECHNOLOGY CENTER

3610 COLLINS FERRY ROADMORGANTOWN, WV 26507

IN ACCORDANCE WITHCONTRACT No. DE-AC21-95MC32185

PREPARED BY

The WVU NATIONAL RESEARCH CENTER FOR COAL and ENERGY

and

APPALACHIAN-PACIFIC COAL MINE METHANE POWER COMPANY, LLC

October 29, 1999

This topical report was prepared by:

Dr. Kashi Aminian, West Virginia UniversityDr. Lloyd English, West Virginia UniversityDr. Douglas Patchen, West Virginia UniversityDr. Hema Siriwardane, West Virginia University

and

Mr. Charles D. Estes; Appalachian-Pacific, Washington, DCDr. Raymond L. Zahradnik, Appalachian-Pacific, Washington, DC

Acknowledgement is also made of the contributions to this report by:

Dr. Richard Bajura, Director of NRCCE.Jody Stirewalt; President, Automotive Research Technologies, Inc.Alissa Oppenheimer, GRI

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EXECUTIVE SUMMARY

This Draft Technical Report is being submitted in accordance with the terms of thecontract for this work, METC Contract No. DE-AC21-95MC32185.

This report describes a project to convert approximately 1.4 million cubic feet perday of Coal Mine Methane (CMM) into LNG at a site near Fairmont, West Virginia. TheCMM is provided by Invitation Energy, Inc. and is being produced from abandoned minesin the area. About 10,000 gal per day of LNG will be produced and marketed astransportation fuel for the I-79 corridor in cooperation with an existing vendor ofalternative fuels.

The technology for the project to produce LNG from CMM consists of three parts:

1. A cryogenic liquefier (TASHER) for methane.

2. A gas conditioning plant which conditions the raw CMM to the specificationsof the TASHER unit.

3. On-site storage for the LNG and a distribution system to deliver the LNG tomarkets.

Beyond the technical components noted above, the demonstration project willdevelop data related to the economic optimization of construction and operating expensesfor subsequent commercial projects. In addition, as the first eastern US LNG projectdedicated to producing and distributing transportation fuels, the demonstration project isintended to define and resolve regulatory issues and prepare the heavy duty fleet vehiclemarket for subsequent adoption of LNG on a broader scale.

Market preparation activities integral to the proposed project will include: safetyand utilization education and training for potential customers and their employees,insurance against customer equipment failure or loss of service, and initial distribution ofLNG from backup suppliers to ascertain market readiness before a final decision to investin the demonstration equipment.

The project would be accomplished over a period of 36 months once the ongoing500 gallon-per-day TASHER tests are satisfactorily completed by Cryenco, thetechnology developer. In June 2000 the project would initiate acquisition of LNG from abackup supplier and begin to market the fuel to heavy vehicle fleet operators in northernWest Virginia and southwestern Pennsylvania. Decisions to purchase major equipmentwould be confirmed if total customer commitments to purchase LNG exceed 2,500gallons-per-day by September 2000. Assuming fabrication of the TASHER beginning inOctober 2000, delivery of the liquefier would occur the following May, with initial startupof the unit in June 2001. Optimization of the TASHER to operate on CMM, andparticularly refinement of gas conditioning processes, is expected to require up to oneyear. A follow-up year of stable operations would conclude the demonstration project inJune 2003.

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The proposed demonstration to convert CMM into LNG will deliver substantialdirect and indirect environmental benefits. First, as the methane in CMM is a potentgreenhouse gas with 24.6 times the radiative impact of carbon dioxide, its capture and useby the 10,000 gpd TASHER project at a rate of 1.4 million scf-per-day equates to 225,000metric tons of CO2 avoidance each year. In other terms, the greenhouse gas reductionbenefits of this one relatively small liquefier are equal to the carbon sequestration of11,500,000 Silver Maple trees. In addition to these direct benefits of the demonstrationproject, the domestic potential exists for dozens of similar commercial projects usingCMM in Appalachia, Illinois, Colorado and Utah. Hundreds of additional TASHERScould be deployed overseas in gassy coal mining areas throughout eastern andnorthwestern China where LNG could be transported to remote villages and vaporized foroff-grid use where pipelines are not practical. Eastern Europe also offers potential fortransportation uses of LNG derived from CMM.

Indirect environmental benefits would also be achieved by the substitution of LNGin transportation applications for diesel fuel which contains approximately 20 percentmore carbon for an equivalent Btu content. Additionally, particulate emissions would benearly eliminated by the use of LNG.

Market studies confirm the potential for selling the LNG product of thedemonstration plant within a 100 mile radius of the project site. This potential isenhanced by a West Virginia tax credit of up to $50,000 per vehicle to purchase or convertheavy vehicles to alternative fuels such as LNG. Federal tax incentives, other financialassistance as well as technical assistance also are available in the project area. The marketpotential is also advantaged by the presence of a DOE-sponsored seven vehicle "realworld" demonstration of LNG operations and a fueling facility at Waste Management'sWashington, Pennsylvania landfill.

The team proposing the demonstration project is composed of Appalachian-PacificCoal Mine Methane Power Company; West Virginia University, including the NationalAlternate Fuels Training Consortium and Cryenco, the TASHER technology owner andequipment vendor. The team will be supported by Gregg Swift, Los Alamos NationalLaboratory; Alissa Oppenheimer, Gas Research Institute; Waste Management ofWashington, Pennsylvania; Invitation Energy, Mannington, West Virginia; and the Stateof West Virginia, among others. Appalachian-Pacific, a West Virginia limited liabilitycompany established in 1996 for the purpose of producing and marketing products fromCMM, will be the prime contractor and project manager.

Appalachian-Pacific has negotiated with Cryenco and has secured exclusiveworldwide rights to use and market the TASHER technology for CMM applications. Inaddition, Appalachian-Pacific has negotiated exclusive rights to use and market theTASHER technology operating on any practical feedstock for the production oftransportation fuels in certain states in the eastern US.

The proposed CMM to LNG project will have a total cost of $10,018,879. Thistotal includes a capital cost of $7,340,394, of which the State of West Virginia will

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provide an estimated $4,000,000. The DOE is being asked to provide one half theremainder of the Capital Cost and to share equally in the 24-month operating cost. Thiswill bring the total requested from the DOE to approximately $3 million, or less than onethird of the total project cost.

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TABLE OF CONTENTSPage

Introduction……………………………………………………………………........ 91.0 Project History…………………………………………………………… 102.0 Development of Current Project………………………………………… 133.0 Summary of Technical and Financial Considerations for an LNG

Project……………………………………………………………………. 163.1 Technical C onsiderations………..……………………………………… 163.2 Financial Considerations………………………………………………… 174.0 Evaluation of the Initial Coal Mine Methane Reserve………………… 184.1 Coal Mine Methane……………………………………………………… 184.2 Assumptions Made………………………………………………………. 204.3 Coal Mine Gas Volume Estimates……………………………………… 205.0 Practical Use of Coal Mine Methane…………………………………… 235.1 CMM Composition Discussion…………………………………………. 236.0 Rational for Project configuration…………………………….……….. 296.1 TASHER Discussion…………………………………………………….. 316.2 Gas Conditioning Discussion…………………………………………… 347.0 Technical Description of Project…………………………………….… 447.1 Overall Process Diagram – Heat and Material Balances………..,….. 447.2.0 Description of Individual Processes…………………………………… 497.2.1 TASHER………………………………………………………………… 497.2.2 Gas Conditioning System……………………………………………… 548.0 Project Site……………………………………………………………… 558.1 Demonstration Project Utility Requirements, Plot Plan, Installation,

Permitting and Financial Considerations……………………………… 598.1.1 Utilities Required for a 10,000 gpd TASHER Demonstration……… 598.1.2 Plot Plan for the LNG demonstration Equipment……………………. 598.1.3 Alternatives for Siting the Plot Plan at Invitation Energy’s Whetstone Portal………………………………………………………… 618.2 Cost Estimates and Evaluations for Site Preparation…………………. 698.2.1 References for Cost Estimates of Site Preparation…….…………….… 718.2.2 Description of Site Layout……………………………………………….. 719.0 Financial Analysis……………………………………………………….. 739.1 Capital and Operating Cost Estimates…………………………………. 739.1.1 Capital Cost Estimates…………………………………………………… 739.1.2 Operation and Maintenance Cost Estimates………………………….. 739.2 Project Financing and Financial Performance………………………… 14510.0 Market Survey and Analysis of Demonstration Project LNG Sales Issues……………………………………………………………….. 7410.1 Market Survey in Northern West Virginia and Southwestern

Pennsylvania………………………………………………………………. 7410.1.1 Introduction……………………………………………………..………… 7410.1.2 Background Data………………………………………………………… 7410.1.3 Background, LNG Equipment Cost and Use………………………….. 7510.1.4 Survey Design……………………………………………………………. 76

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Page

10.1.5 Survey Results…………………………………………………………. 7610.2 Regulatory Issues……………………………………………………… 7810.2.2 Regulatory Issues Associated with Transporting LNG

through Marion County………………………………………………. 7810.2.3 Regulatory Issues Relating to Distribution from a Mobile Refueling

Station…………………………………………………………………… 7910.2.4 Regulatory Issues Related to the Use of LNG in Vehicles……………. 7910.3 Marketing Strategy: Demonstration Project and Subsequent

Commercial Sales………………………………………………………... 8010.3.1 Define the Project’s Market Area………………………………………. 14910.3.2 Potential Customers in Market Radius………………………………… 149 10.3.3 Potential Competitors Other than Diesel Marketers…………………. 15010.3.4 Market Area Education Plan……………………………………...…… 15210.3.5 Strategy for Fueling the Initial LNG Market…………………………. 153 10.4 Commercial Potential…………………………………………………… 8111.0 Project Development……………………………………………………. 8311.1 Organization and Key Personnel………………………………………. 8311.2 Project Schedule………………………………………………………… 8511.2.1 Statement of Work for Cryenco Test Program……………………..… 8511.2.2 Statement of Work for Demonstration Project………………………. 8612.0 Environmental Considerations and Benefits……………….………… 8812.1 Demonstration Project site Impact Analysis…………………………. 8812.1.1 Gas Reserve……………………………………………………………. 8812.1.2 Potential Water Pollution……………………………………………… 8812.1.3 Potential Soil Damage from Leakage of Lubricants…………………. 88

LIST OF TABLES

Table 1 Required Selling Price for Gob Gas Under Various Scenarios… 11Table 2 Project Cost Summary……………………………………………. 17Table 3 Gas Volume Estimates at the Mine Site………………………….. 21Table 4 Assumed Gas Content Data for the Mine………………………… 22Table 5 Composition of CMM from Various Sources……………………. 26Table 6 Calculated Equilibrium Conditions for Ternary CH4 – 02 – N2

System……………………………………………………………… 40Table 7 Heat and Material Balances for Project………………………….. 45Table 8 Cost Estimates for Site Preparation………………………………. 69Table 9 Estimates of Project Capital Cost………………………………… 145Table 10 Estimates for Project Operating Cost…………………………… 146Table 11 Project Pro Forma………………………………………………… 147Table 12 Total LNG Demonstration Project Funding……………………… 73Table 13 Fuel Properties Comparison (Source: ALT Brochure 1998)……. 75Table 14 LNG Production Facilities in Nearby States……………………… 151

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LIST OF FIGURESPage

Figure 1 Block Diagram of Process to Upgrade CMM to PQ Gas…………. 11Figure 2 Increase in Value Added to Gob Gas at Various Stages in the

Process……………………………………………………………….. 12Figure 3 Total Gob Gas Production………………………………………….. 15Figure 4Figure 5 Carbon Dioxide Variation with Time for Several CMM Source… 24Figure 6 Flow Variations of Individual Sources…………………………….. 25Figure 7 Average Daily Production of CMM from All Sites……………….. 25Figure 7a Plots of CO2 and Nitrogen Over Time at Four Sites……………… 27Figure 8 Schematic of Proposed CMM Project……………………………… 30Figure 9 Block Diagram of Gas Constituent Removal from CMM………… 35Figure 10 Typical Flow Diagram of Absorbing Systems……………………… 37Figure 11 Typical Flow Diagram of Adsorption Systems (Molecular Sieves). 38Figure 12 Comparison of Equilibrium Data and Raoult’s Law for CH4 – N2

System……………………………………………………………….. 39Figure 13 Comparison of Equilibrium Data and Raoult’s Law for CH4 – N2

System………………………………………………………………. 39Figure 14 Illustration of Removal of LNG and Uncondensed Gases from

TASHER……………………………………………………………… 41Figure 15 Removal of Oxygen from the inlet CMM Can Be Avoided………. 41Figure 16 Block Diagram of Gas Conditioning System Using Molecular

Sieves…………………………………………………………………. 42Figure 17 Alternate Block Diagram of Gas Conditioning System Using

Molecular Sieves…………………………………………………… 43Figure 18 Proposed Project Flow Diagram……………………………….…. 44Figure 19 DEA Gas Conditioning Process…………………………………… 46Figure 20 OPC Engineering DRIZO Dehydration Process………………… 47Figure 21 Alternative Gas Conditioning System……………………………… 48Figure 22 Schematic of 10,000 Gallon per Day TASHER Unit……………… 50Figure 23 Schematic of TASHER Recirculation Loop………………………. 51Figure 23a Thermoacoustic Driver Illustration……….………………………. 52Figure 23b Orifice Pulse Tube Refrigerator Illustration..……………………. 53Figure 24 Map: Pittsburgh Coal Seam Base Elevations, Consol No. 9 Mine. 56Figure 25 Map: Topographic Conditions in Immediate Project Area……… 57Figure 26 Core Sample, Plum Run Hole #6…………………………………… 58Figure 27 Proposed Project Layout on Site 2…………………………………. 60Figure 28 Illustration of Five Candidate Sites………………………………… 62Figure 29 Potential LNG Market with Fuel Use Growth……………………. 77Figure 30 Sensitivity of LNG Project to Gas Purchase Cost and LNG Sales

Price…………………………………………………………………… 81Figure 31 Project Profitability After DOE Funding Ends…………………… 82Figure 32 Project Team Organization Chart………………………………… 84Figure 33 Planned Project Schedule…………………………………………. 90

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LIST OF PICTURESPage

Picture 1 Potential Project Site #1………………………………………… 63Picture 2 Preferred Project Site #2………………………………………… 64Picture 3 Potential Project Site #3…………………………………………. 65Picture 4 Potential Project Site #4…………………………………………. 66Picture 5 Potential Project Site #5…………………………………………. 67Picture 6 Site #2 Drainage…………………………………………………. 68

Appendices

Resumes of Key Personnel…………………………………………….. Appendix 1Introduction of Appalachian-Pacific Coal Mine MethanePower Company, LLC………………………………………………….. Appendix 2Letters of Cooperators and Letters of Endorsement………………… Appendix 3West Virginia Alternative Fuel Vehicle Tax Credit…………………. Appendix 4Calculation for Greenhouse Gas Impact of LNG Project…………… Appendix 5Technical Papers Related to Thermoacoustic Liquefier Technology.. Appendix 6Company Profiles: CRYENCO/Chart Industries…………………… Appendix 7Price Quote on Cooling Towers……………………………………….. Appendix 8Financial Analysis of Project………………………………………….. Appendix 9Marketing Strategy for Project……………………………………….. Appendix 10Identification and Qualification of Potential Market for LNGFor Transportation Fuel in the Morgantown, West Virginia area….. Appendix 11

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Introduction

This report describes the activity undertaken by the project members under METCcontract No. DE-AC21-95MC32185 to develop a project that will provide a commercialuse for Coal Mine Methane (CMM).

In particular, the report describes a project to convert CMM into LNG and tomarket that LNG to the transportation sector in and around the I-79 corridor nearMorgantown, West Virginia.

The report discusses the sources of CMM and provides estimates of the extent ofthe resource specifically dedicated to the project. It discusses the novel refrigerationtechnology that will be employed to convert the CMM to LNG and the gas conditioningtechnology that will be used to bring the raw CMM up to cryogenic processingspecifications.

Summary capital and operating cost estimates are furnished for the project andspecific monetary and schedule requirements are identified so the project can be examinedin its entirety.

The report discusses the immediate market potential for the successful commercialsale of LNG into the nearby market and provides estimates of future market penetrationinto local, regional and wider markets.

Lastly, the report comments on the environmental effects of the project andextrapolates these benefits to future markets. One of the driving forces for the project isthe reduction of environmentally harmful greenhouse gases currently escaping uncheckedinto the atmosphere. This final section analyzes the TASHER technology's potential netenvironmental benefits both in terms of greenhouse gases and criteria pollutants.

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1.0 Project History

In the Topical Report for this project, dated July 21, 1995 (3), it was pointed outthat there are a number of options for the commercial utilization of CMM. The CMMcould be sold as is to a pipeline as Near Pipeline Quality (NPQ) gas, or it could beconditioned to meet pipeline specifications and sold into the pipeline as a commodityPipeline Quality (PQ) gas. The use of CMM as a "cushion" gas in a commercial gasstorage reservoir was discussed, and the option of using CMM to generate on-siteelectricity was described in detail.

It may be useful to recall the technology required to condition CMM to PQ gas.Figure 1 is a simplified block diagram of the steps involved. The most difficult and costlystep in the process is the Nitrogen Rejection Unit (NRU). For NRU's, the CO2 content ofthe inlet gas must be reduced below 200 ppmv, normally through the use of an amine typetreating unit. Essentially, all of the water must be removed by utilizing a molecular sieveprocess. The NRU process results in a residue stream at a very low pressure requiringsignificant horsepower to recompress the gas for sale to a pipeline.

In the topical Report, the cost of this processing was estimated using capital andcost information provided by Purvin and Gertz (6). Their capital costs for the NRU werebased upon dehydration with a molecular sieve and enough horsepower to return theresidual gas to a pipeline at 800 psig. The costs did not include an upstream amine unit toremove CO2 or an upstream glycol unit to reduce the load on the molecular sieve. Sotypical DEA and glycol plants were inserted, and their cost estimated for a water-saturated,2.5% acid gas from data provided by Purvin and Gertz.

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CATALYTICOXIDATION

DRYING AND CO 2

REMOVAL ASNECESSARY

NITROGENREJECTIONUNIT

TO PIPELINE

CH4 = 88%

O 2 = 2.5%

N2 = 8.5%

CO 2 = 1.0%

CH4 = 89%

O 2 = 0%

N2 = 8.7%

CO 2 = 2.3%

CH4 = 91%O 2 = 0%N2 = 8.9%

CO 2 = 0.1%

CH4 = 97%O 2 = 0%

N2 = 2.9%

CO 2 = 0.1%

PROCESS SCHEMATIC FOR UPGRADINGGOB GAS TO P IPELINE QUALITY

Figure 1 Block Diagram of process to Upgrade CMM to PQ Gas

The Topical Report provided a basis for evaluating the required selling prices forthe various options. The conclusions at that time are provided here in Table 1 andgraphically as Figure 2.

USE $/MCF

NPQ GAS TO POWER PLANT 0.87NPQ GAS TO PIPELINE 1.13PQ GAS TO PIPELINE 2.01

Table 1 Required Selling Price for Gob Gas Under Various Scenarios, withConsistent Financial Assumptions. (These Numbers are Specific to the EmeraldMine, with Storage at the Kirby Reservoir.)

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Some brief explanation of Table 1 is in order. The required selling prices ofthe gas streams indicated in the table represent the cost to the project of providing the gobgas to the point in question. Thus, all situations require purchase, gathering andtransmission of the gob gas to some point. If that point is the fence of an on site powergeneration unit, the price of the sale would be $0.87/MCF. If, however, the point of salewere to a pipeline, the gas would have to be further conditioned. It would have to becompressed, in the case of the NPQ sale, requiring a price of $1.13. If, on the other hand,the gas were to be conditioned to pipeline specifications, requiring a processing plant, therequired selling price would be $2.01/MCF. In other words, the conditioning of the rawgas that would go to a power plant to PQ gas increases its value by (costs the project)$1.14/MCF.

On the other hand, if the power plant were part of the project, the sale of electricityat 4.5 cents/kWh is equivalent to selling gas at $3/MCF. It is possible to express thissituation in a graphical way by attributing to the gas an increased value as it passes throughthe process of being collected, transmitted to storage, stored, and transmitted to its end use.Figure 2 shows this.

A T T R I B U T E D C O S T O F G O B G A S I N P A S S A G E T H R O U G H

P R O C E S S

CO

ST

($/

MC

F)

0 . 0 0

0 . 5 0

1 . 0 0

1 . 5 0

2 . 0 0

2 . 5 0

3 . 0 0

P U R C H A S E G A T H E R T R A N S M I T S T O R E T R A N S M I T

P O W E R G E N E R A T I O N

P Q G A S

N P Q G A S

Figure 2. Increase in value added to gob gas at various stages in the process.

At the time of the writing of the Topical Report, July 21, 1995, all four of theseoptions were open to the project, as the Report stated. Using Figure 2 and Table 1together, it is easy to get a general idea about the various options. The generation ofelectricity represents the highest value of the gas for the options considered. The feed gas

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to the power option represents the lowest cost for the gas, conditioned to that use. Thisoption also represents the greatest project investment.

On the basis of the work leading up to and subsequent to the Topical Report, aProject Partnership Agreement was completed between Appalachian-Pacific LLC andEquitrans, Inc. to develop a project at the Emerald mine and/or the Cumberland mine,utilizing the Kirby gas storage reservoir.

Among the early project configurations considered by the partnership was the saleof NPQ gas or pipeline quality gas into the Equitable gas utility distributuion system. Aftersome study, Equitrans informed the partnership that it was not interested in purchasingeither NPQ or PQ gas from the project.

Thereafter, the partnership concentrated on the option to generate on-site electricityand to sell some or all of this electricity to the Emerald mine and/or the Cumberland mine.The project developed detailed capital and operating cost projections for this option andcarried out an extensive study of the gas production potential at the two mines. This workresulted in a number of proposals being made to Cyprus/Amax, in the summer of 1996 andin early 1997. These proposals were turned down by Cyprus/Amax which concurrentlynegotiated with Allegheny Power for a reduction in the price of electric service for theirmine operations. Consequently, the project began to search for new CMM sites and newproject options.

2.0 Development of Current Project

As described above and reported to the DOE in May and June 1998, the failure toreach an agreement with Cyprus/Amax concerning the use of their gob gas (or any otherCMM) from either the Cumberland or the Emerald mine forced a search for other sourcesof CMM and a reexamination of alternate project configurations.

As a result of that search, the project team concluded that acquisition of CMMfrom a third party offered several advantages over securing a source of supply directlyfrom a mine site. Foremost among these advantages is the fact that third party owners ofCMM generally are in business principally to sell that resource while the project team'sexperience is that coal mining companies are focused strictly on their mining operations.Consequently, it has proven difficult to persuade coal mine operators to consider withalacrity even a venture such as the proposal to Cyprus/Amax which offered an attractiverate of return (ca. 20 percent) and which had pre-clearance from Equitrans for projectfinancing. Apparent reasons for many mine operators' hesitance to enter into venturesproducing electric power from their CMM resource include: first, potential electric salesor savings represent a relatively small percent of a large mine's revenue stream (< 1percent), gob gas collection, in particular, represents continuing and changing surfaceactivities with no benefit to mine operations (e.g. ventilation) which are their primaryconcern. (CMM collected by installing pre-mining degasification wells can offersignificant benefits to mine operations; however, as detailed elsewhere in this report, the

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highest and best use of CMM from this relatively pure source is probably sale to apipeline instead of fuel for an electric power generator.) Second, production and/or use ofelectricity is not their business: it is a distraction. Third, and perhaps most important, coalmine operators are in business to mine coal for sale principally (>90 percent) to customerswho make electricity. Consequently, the mine operators are very reluctant to beperceived, even in a minor way, as competing with their dominant customers.

Our search for a new project site and project structure was further guided by theteams' conviction developed during the Cyprus Emerald and Cumberland mine studiesthat, due to the variabilities of CMM gas production, on-site storage of the gas is essentialfor the practical operation of any coal mine methane project. See Figure 3 for anillustration of gob gas production variability rates at a typical multi-well site. While it ispossible to size and operate an electric power generation project at maximum or minimumCMM flow rates, neither is practical. Minimum scale projects tend to have high capitalcosts per unit of power produced and, therefore, generally are not competitive in thegeneration market. Power generation projects which are scaled to use peak, or near peak,CMM flows will regularly under-perform their rated capacity with generation followingthe fluctuations noted in Figure 3. There is little demand for power that may or may notbe available when customers need it.

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Having determined that on-site gas storage is essential, it is also clear that co-location of suitable underground gas storage facilities with large, gassy coal mines is anunusual occurrence. Moreover, existing or new gas storage reservoirs are expensive toacquire and operate. Also, alternative storage in abandoned underground mines has somerisk of leakage and contamination. The project team concludes that both storage options,by nature, are generally impractical to support a CMM-fueled electric power generator ofany size less than ten megawatts. Underground storage requirements, then, place severelimitations on candidate CMM project sites and scales.

The project team's concerns noted above regarding underground storage of CMMlead us to explore other options for the storage and supply of CMM in a condition and at arate as demanded by project operations. A small gas liquefier to produce storableliquefied natural gas from CMM was selected as the optimum solution for the project'sstorage requirements. Not only does the liquefier permit flexibility of project location, itopens significant, new, high-valued markets for products of CMM as will be discussedlater in this report.

Further, the desire to deal with a "third party" CMM gas supplier with access tomultiple sources of CMM in northern West Virginia, close to these new markets leadAppalachian-Pacific, a member of the project team, to negotiate with Invitation Energy ofMannington, West Virginia for a stable supply of CMM. An agreement was reached withInvitation Energy in April 1999. Relevant details of that agreement are included inAppendix 4.

3.0 Summary of Technical and Financial Considerations for an LNG Project

3.1 Technical Considerations

CMM will be purchased by the project from Invitation Energy, Inc., which has theability to produce the CMM from various operating and abandoned coal mines in, or near,Marion County, West Virginia. This gas is then processed in a Gas Conditioning unit,which will condition the gas to acceptable specs for the process side (refrigeration section)of the TASHER. The CMM will also be used as fuel gas to the TASHER combustor andto other process heaters and perhaps to a small engine/generator set power unit.

In the TASHER combustor, as well as in the other process heaters, the CMM fuelgas will be burned with air, creating a hot (200-300 deg F) flue gas, which would bedischarged to the atmosphere in an environmentally acceptable way.

The CMM, conditioned to meet TASHER specs, will be supplied to the TASHERas process gas, where it will be converted to LNG, stored and shipped to market. Thecooling requirements of the TASHER will be provided by cooling water, which is chilledon site by means of a cooling tower.

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The electrical requirements for this operation may be provided by purchasedelectricity or by electricity generated in a small (ca. 300 kW) gen. set.

3.2 Financial Considerations

A CMM to LNG project is being proposed that will have a total cost of$10,018,879. This total includes a capital cost of $7,340,394, of which the State of WestVirginia will provide $4,000,000. The DOE is being asked to provide one-half theremainder of the Capital Cost and to share equally in the two year operating cost. Thiswill bring the amount requested from the DOE to approximately $3 million, less than onethird of the total project cost.

TOTAL PROJECT $10,018,879STATE $4,000,000

TOTAL DOE $2,950,000

DIFFERENCE $3,068,879 (PAID BY PROJECT)

Table 2 Project Cost Summary

While Appendix 4 shows that members of the project team have negotiatedspecific quantities and conditions for a supply of CMM to fuel this demonstration project,for assurance purposes the team also conducted an analysis of potential gas availability atInvitation Energy's sites. A separate study of the anticipated composition anddeliverability of that gas was also conducted. The results of those studies follow.

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4.0 Evaluation of the Initial Coal Mine Methane Reserve

The principal mine under consideration for this analysis, Consolidated No. 9, hasbeen closed for more than 30 years. Since the beginning of the mining activity at this site,the coal mine methane produced at the site has been vented to the atmosphere. Since coalmine methane has been liberated over many years, the remaining gas reserve is unknown. Inthis section of the report, the original gas reserve is estimated based on several assumptionsthat are presented below. The onsite utilization of coal mine gas would have reduced themethane gas that has been vented to the atmosphere. In that sense, the estimated gas reservewould show the extent of the environmental problem, if the coal mine gas was vented to theatmosphere.

During the mining activity, the primary coal seam is extracted in the mine, whichleaves a large unsupported underground cavity. The extraction ratio in certain sections of themine is 100%, while this ratio typically varies between 40% to 60% over the remaining areaas shown in Figure 4. One major consequence of mining is the fracture zone generated bythe removal of the primary coal seam. During the roof collapse, the rock strata above themine roof are fractured and broken. The extent of the fracture zone above a mine panel candepend on many factors. The size of the fracture zone is normally unknown. The actual sizeof the fracture zone needs to be determined from field measurements.

4.1 Coal Mine Methane

The methane concentration at the mine face is an important factor related to thesafety of mine workers. The coal mine methane gas could be released from the primary coalseam and the nearby gas bearing strata located within the fracture zone. The methaneconcentration at the underground mine is lowered by introducing air into the undergroundmine ventilation system. Moreover, wells are installed to vent coal mine methane released(or generated) in the fracture zone so that it would not enter the mine ventilation system. Inview of the high quality of the coal mine methane it can be used for on-site power generation or for other commercial purposes.

While the source of coal mine methane is unknown, it is assumed that the gas couldbe released from the gas bearing strata located in the fracture zone above the mine roof. Theexact size of the fracture zone is also unknown, and the exact size needs to be determinedfrom field measurements. The strata permeability to gas flow in the fracture zone can beexpected to be higher than that of the intact overburden rock in view of the post-miningfractures generated during roof collapse. Increase in the strata permeability can facilitate therelease of gas contained in other gas-bearing strata located within the fracture zone.Therefore, the evaluation of coal mine gas potential at a mine site needs to be based on thefactors such as the size of the fracture and the gas content of strata located in this zone.

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In this report, the initial reserve of coal mine methane gas is estimated for theConsolidated No. 9 mine located in Mannington, West Virginia. A core sample providinggeologic information at the mine site is presented in Figure 5. The estimates are based on thefollowing assumptions.

4.2 Assumptions Made

1. It is assumed that the gas is generated only from secondary coal seams found in theoverburden. The gas potential from other gas bearing strata, if any, is neglected.

2. The gas content information on secondary coal seams is not available at the minesite. It is assumed that the gas content of all secondary seams is the same.

(a) The gas content of secondary coal seams is assumed to be 100 cubic feet/ton.(b) The gas content of the primary coal seam is assumed to be 150 feet/ton.

3. The height of the fracture is assumed as 350 feet. The extent of gas reservoir isassumed as the area of the mine under consideration.

4. The unit weight of the primary and secondary coal seams was assumed as 84 lb/ft3.

4.3 Coal Mine Gas Volume Estimates

A map of the mine is shown in Figure 6. The gas reservoir is assumed to cover thearea of the entire mine. The thickness of the primary coal seam is assumed as 6 feet. The gaspotential from the primary coal seam is reported elsewhere in the report. The cumulativethickness of secondary coal seams located in the overburden is estimated as 13.33 feetover a distance of 300 feet above the mine floor. Assuming that the gas is produced from allof the secondary coal seams located within the fracture zone, the total gas potential wascalculated and the estimates are shown in Table 3. This table presents estimates based onthe assumed gas content data shown in Table 4.

As can be seen from this Table, the initial coal mine gas potential is substantial at themine. The remaining gas volume is unknown at this time. The usage of this gas in powergeneration will contribute towards a reduction of methane - a greenhouse gas - vented to theatmosphere.

20

Panel Identification Gas Volume Based on40% extraction ratio for theprimary seam in area 2

(cubic feet)

Gas Volume Based on60% extraction ratio for theprimary seam in area 2

(cubic feet)

Comments

Contribution fromremaining primary coalseam

4,823,902,755 3,215,935,170

Contribution from thesecondary coal seams

19,206,279,637 19,206,279,637

Initial Gas Potential 24,030,182,392 22,422,214,807

Table 3 Gas Volume Estimates at the Mine site

Area of the gas reservoir for secondary coal seams = 343,055,043 ft2

Area of the gas reservoir for the remaining primary coal seamFor extraction ratio = 40%, A = 127,616,475 ft2

For extraction ratio = 60%, A = 85,077,650 ft2

21

Coal Seam Thickness (ft) Gas Content(Cubic feet/ton)

Comment

Primary Seam: Pittsburghcoal

6.0 150

Secondary Seams:

Pittsburgh Riders 2.00 100

Waynesburg 3.92 100

Swickley 5.5 100

Fishport 0.83 100

Redstone 1.08 100

Total secondaryCoal Thickness =13.33 ft

Table 4 Assumed Gas Content Data for the Mine

22

5.0 Practical Use of Coal Mine Methane

5.1 CMM Composition Discussion

CMM recovered from abandoned coal mines may indeed have a differentcomposition from the gob gases at the Cumberland/Emerald mines. To determine whatcomposition shut in mine gases might have, CMM data produced from abandoned minesnear the project area were analyzed. Basically, the results of this analysis suggest that agas with a Carbon Dioxide composition less than 1 % and nitrogen content less than 2.5%may be expected (see Figure 5 and Table 5). If CMM can indeed be delivered to theproject at these composition levels, then the gas conditioning step could be simplified,with attendant reduction in the estimated capital and operating costs.

Gas of this mean composition could be conditioned to meet TASHER specs in asimpler and less expensive way than gas of the composition of the Cumberland/Emeraldmine gob gases. For example, it may be possible to use only a molecular sieve unit.

Although the average CO2 composition may be able to be handled by a simplifiedgas conditioning step, it is important to examine the variation in time of the CO2 levels.Figure 5 shows the variation with time of the CO2 levels from the various tracking pointsfor the data being discussed. Note that with the exception of the Hill and Dillie data, mostof the other measurements indicate a CO2 level below 1%, with only minor (timewise)excursions above that level. Again, this trend suggests that a simplified gas processingstep may be sufficient to condition the gas to TASHER specs.

Figure 6 shows the flow variation of various CMM sources with time. Figure 7 isa composite of the individual flow rates as a function of time. It is not clear that thechanges in flow that occur over time are the result of natural causes or whether the flowswere purposely adjusted to meet demand. (In other words, was the total (and individual)flow deliberately restricted at various times in order to maintain composition relativelyconstant.) In any case, it is clear that for both the TASHER Demo project and forsubsequent commercial operations a constant delivery of CMM will be necessary.Whether such levelizing will cause a corresponding wider variation in composition thandisplayed in the data analyzed in this report is not clear at this time.

23

Carbon Dioxide Variation with Time for Several CMM Sources

-0.5

0

0.5

1

1.5

2

2.5

3

27-Sep-97 5-Jan-98 15-Apr-98 24-Jul-98 1-Nov-98 9-Feb-99 20-May-99 28-Aug-99

Date

Car

bo

n D

ioxi

de

% in

CM

M

Figure 5

24

650

700

750

800

850

900

MC

F/D

1-98 3-98 5-98 7-98 9-98 11-98 1-99 3-99DATE

A L L S I T E S

AVERAGE DAILY PRODUCTION, MCF

0

2000

4000

6000

8000

10000

FLO

W R

AT

E C

FP

M

1-982-983-984-985-986-987-988-989-9810-9811-9812-981-992-993-99DATE

TIME VARIATION OF CMM SOURCES

25

DAYBROOK Methane Nitrogen CO2 Heating Value

Mean 96.76 2.28 0.56 990xStandard Deviation 2.25 2.13 0.33 22Minimum 85.71 0.00 0.00 878Maximum 99.51 13.83 1.72 1014

DILLIEMean 97.13 1.30 1.28 992StandardDeviation 1.17 1.03 0.16 10Minimum 91.54 0.37 1.11 954Maximum 98.17 5.29 2.26 1002

DEGASMean 96.51 2.53 0.64 985StandardDeviation 0.99 0.96 0.15 10Minimum 94.85 0.00 0.26 967Maximum 99.17 4.31 0.89 1012

JONESMean 98.02 0.87 0.89 999StandardDeviation 1.21 1.22 0.11 13Minimum 93.58 0.00 0.31 954Maximum 98.76 5.34 1.10 1011

HILLMean 96.05 2.16 1.54 980StandardDeviation 1.48 1.17 0.51 14Minimum 92.54 0.25 0.73 943Maximum 98.34 5.56 2.48 1001

BRRKOVERMean 96.36 2.35 0.82 988Standard Deviation 1.30 1.28 0.19 13Minimum 91.28 0.00 0.30 935Maximum 98.74 7.62 1.53 1012

MOORSVILLEMean 92.49 1.62 0.91 1049StandardDeviation 2.68 0.80 0.33 38Minimum 84.58 0.00 0.21 981Maximum 96.07 3.31 1.56 1170

Table 5 Composition of CMM from Various Sources

26

Figure 7a Composition of CMM from Four Selected Sources

brkrvvr

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

9/27/97 1/5/98 4/15/98 7/24/98 11/1/98 2/9/99 5/20/99 8/28/99

Series1

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jonesdata

0

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2

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4

5

6

7

9/27/97 1/5/98 4/15/98 7/24/98 11/1/98 2/9/99 5/20/99 8/28/99

date

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Series2

27

mooresville

-0.5

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

11/16/97 1/5/98 2/24/98 4/15/98 6/4/98 7/24/98 9/12/98 11/1/98 12/21/98 2/9/99 3/31/99 5/20/99

Series1

Series2

0

1

2

3

4

5

6

1/5/98 7/24/98 2/9/99 8/28/99

Series1

Series2

Another way of dealing with composition variability is to provide some storagecapacity on site to dampen out the variations. If the feed gas to the project is made up ofthe discharge from several locations, this dampening effect may occur naturally. On theother hand, on-site storage may be the only positive way to ensure that compositionvariability is kept to a minimum. The cost effectiveness of this approach vs. having

28

excess adsorbent capacity vs. having a back up DEA unit needs to be considered once aCMM gas composition representative of the project has been identified.

A complete analysis of this data awaits more erudite scrutiny, but the above 4 plotsare of the time variations of flow and the sum of CO2 and N2. It appears that there may besome correlation between these two variables, suggesting that perhaps the flow is backedoff if the CO2 plus N2 approaches the pipeline spec of 4%.

6.0 Rationale for Project Configuration

In the course of investigating possible commercial uses for coal mine methane(CMM), the liquefaction of CMM to Liquefied Natural Gas (LNG) for use in thetransportation sector emerged as a viable opportunity. This would be true especially if alow cost and efficient liquefier were available and the price of the feed gas wereaccommodating.

To illustrate this point further, LNG sold at 40 cents/gal. would correspond toabout $3.50 - $4.00/MCF on Figure 2, representing a value potential at least as great aspower generation. If the project can secure low cost CMM and condition it to meetliquefier specs, there is a potential for an economically viable project.

As it turns out, a low cost, highly efficient liquefier is being developed byresearchers at Los Alamos National Laboratory (LASL) and Cryenco. The basic featureof this unit is a Thermo-Acoustic Stirling Heat Engine and Refrigerator (TASHER).Cryenco is developing this technology for liquefying natural and industrial Gases.

The TASHER appears to offer low capital and operating costs at small scale (ca.10,000 gal/day) and would be an excellent fit with the needs of CMM projects, promisingto produce LNG from appropriate CMM sources at selling prices that will be competitivein the transportation market as well as for on-site gas storage requirements of CMMelectric generators.

The presently envisioned project will utilize Coal Mine Methane from anabandoned coal mine(s) and convert it to LNG by means of a thermoacoustic natural gasliquefier (TASHER). The LNG so produced will be distributed and sold primarily astransportation fuel to the trucking industry throughout the I-79 corridor in the vicinity ofMorgantown, WV.

Appalachian-Pacific (AP) and Cryenco have signed an agreement confirming theirintention to cooperate in a demonstration program that will include the construction andtesting of a "second generation" TASHER at a scale of at least 500 gallons per day atCryenco's Denver facility. If this demonstration meets certain technical and financialobjectives, AP will purchase, install and operate a ca. 10,000 gal/day TASHER as part ofPhase III of its project with DOE.

29

Cryenco's current test plan for the 500 gal/day demonstration is based on a systemwhich converts pipeline quality natural gas to LNG. Successful test results will representa significant technological advance. However, the proposed demonstration requiresadditional elements for the technology to be applicable to CMM and to contribute togreenhouse gas reduction; namely, the inclusion of a cost effective, small gas cleanupsystem, and a marketing plan that will permit the successful selling of the LNG soproduced.

A schematic diagram for the proposed CMM to LNG project is provided in Figure 8.

SOURCESOF CMM

GASCONDITIONINGPLANT

FUELGAS

PROCESSGAS

COMBUSTIONSECTION OFTASHER

AIR HOT FLUEGAS

TASHER

LNG

LNGSTORAGE

LNGDISTRIBUTION

FLUE GASDISCHARGE

COOLINGWATERTOWER

COOLINGWATERLNG

Bleed

POWERUNIT

FUELGAS

Figure 8 Schematic of proposed CMM project

For the project as currently envisioned, CMM would be provided from one ormore sources to the Gas Conditioning unit, which would condition the gas to acceptablespecs for the process side of the TASHER. The CMM also would be provided as fuel gasto the TASHER combustor and the power unit. In the TASHER combustor, the CMMfuel gas would be burned with air, creating a hot (200-300 deg F) flue gas. Some or all ofthis flue gas, discharged from the TASHER combustion chamber, could be recycled (ifappropriate) to the Gas Conditioning Unit to regenerate spent sorbents. Similarly, theCMM fuel gas and air that combust in the power generation units also would create a hotflue gas that could be used as a waste heat source for either the TASHER or the gasconditioning unit.

30

6.1 TASHER Discussion

A general description of the TADOPTR technology, which is the foundation for the TASHER development, is provided in the words of Cryenco on the following two pages.

Also, several papers discussing the physics of the TASHER and the TADOPTR are provided in Appendix 5 of this report and various illustrations may be found in section 7.2.1.

31

32

33

6.2 Gas Conditioning Discussion

The CMM, conditioned to meet TASHER specs, would be supplied to theTASHER as process gas, where it would be converted to LNG, stored and shipped tomarket. The cooling requirements of the TASHER will be provided by cooling water,which is cooled on site by means of a cooling tower.

The electrical requirements for this operation may be provided by purchasedelectricity or by electricity generated in a small (ca. 300 kW) gen. set.

The specs for the CMM to be converted to LNG would be similar to those for thefeed gas in cryogenic processes, generally. The CMM will have to be dried to a dew pointof -150 degrees F, and the CO2 content must be reduced to about 50 ppm to avoid theformation of dry ice in the orifice refrigeration section of the TASHER. Depending uponthe amount of higher hydrocarbons in the CMM, it could be advisable to remove them(e.g. by mechanical refrigeration) from the CMM prior to its injection into the TASHER.

A block flow diagram for accomplishing this conditioning, based upon thecomposition of the gob gas which the project team sampled during its earlier studies of theCumberland mine, is shown on Figure 9. Also shown for comparison purposes are the gasconditioning steps needed to achieve pipeline quality standards. Notice the similarity tothe Block Flow Diagram for conditioning CMM to PQ gas. The project now beingdeveloped avoids the initial gathering, storage and transmission steps, but most of the gasconditioning processes seem to be needed. Actually, while the specifications on theTASHER feed are quite stringent with respect to water and carbon dioxide, they may bemore relaxed with respect to nitrogen, offering the possibility of avoiding the costly NRUstep.

34

RAWCMM

PURCHASEGATHERTRANSMITSTORERETRIEVE

COMPRESS AND COOL

DEAUNIT

CO2REMOVAL

GLYCOLUNIT

DEHYDRATION

MOLECULARSIEVE UNIT

FINAL CONDITIONING

NRUUNIT

NITROGENREMOVAL

RECOMPRESSION & COOLING

TOPIPELINE

SEND TOPROCESS

CONVERT O2 TO CO2 & H2O

CAT/OXUNIT

RAWCMM

COMPRESS AND COOL

DEAUNIT

CO2REMOVAL

GLYCOLUNIT

DEHYDRATION

MOLECULARSIEVE UNIT

FINAL CONDITIONING

CONVERT O2 TO CO2 & H2O

CAT/OXUNIT

AGENT

TOTASHER

TOP BLOCK FLOW DIAGRAW SHOWS HOW CMM CAN BE CONTITIONED TO PIPELINE SPECIFICATIONS

LOWER BLOCK FLOW DIAGRAM SHOWS HOW PURCHASED CMM CAN BE CONDITIONED TO MEET TODOPTR SPECS

Figure 9 Block Diagram of Gas Constituent Removal from CMM

35

6.2.1 CO2 & H20 Removal Processes

There are several commercial processes for removing CO2 from gas streams.Generally these processes remove acid gases (H2S and CO2) and find most application ingas sweetening (H2S removal). Technically there should be no problem finding a way tocondition CMM to meet the specs for the TASHER. The challenge will be to find aprocess that fits the size of the operation, the remoteness and austerity of the location, the(possible) composition variation in the CMM and the operational durability required toachieve economic viability.

The following technologies report ability to reduce inlet CO2 to levels at or below50 ppmv:

• Diethanolamine (Societe Nationale Elf-Aquitaine version)• Sulfinol• Benfield (Union-Pure version)• Catacarb• Rectisol• Molecular Sieves

The following technologies report ability to achieve minus 150 degree F dewpoint:

• Drizo Process• Molecular Sieves

Most of these technologies involve the use of an absorbing solvent which contactsthe feed gas (in this case the CMM) in an absorber unit at one set of conditions (e.g. highpressure and low temperature) selected to maximize the absorption of the unwanted gasconstituent(s) (CO2 and H2O in our case). The solvent is then circulated to a second unit,the regenerator, where the dissolved gases are released by a combination of heating andpressure release. On the way to the regenerator the solvent passes through a pressure letdown drum where some of the dissolved gases are released. This general scheme isdepicted in Figure 10. The processes listed above follow this general flow chart, but withexceptions and refinements geared to improving various aspects of the process such asefficiency, cost, selectivity, etc.

36

CMM

TO TASHER

CO2 RICH GAS

COOLER

REBOILER

COOLER

HEATEXCHANGER

ABSORBER

REGENERATOR

REFLUXCONDENSER

FLASHDRUM

FUEL GAS

Figure 10 Typical flow diagram of Absorbing Systems

37

Molecular sieves (or other solid adsorbents) also follow this general conceptexcept that the sieves themselves are not circulated between an adsorber unit and aregenerator, but rather remain in a given tower which undergoes alternate cycles ofadsorption and regeneration. See Figure 11.

CMM

ADSORBINGBED

REGENERATINGBED

FUEL GAS

Figure 11 Typical flow diagram of Adsorption Systems (Molecular Sieves)

6.2.2 Nitrogen Removal Processes

The presence of nitrogen in the CMM does not appear to present the problem forconverting CMM into LNG as it does if CMM is introduced directly into a natural gaspipeline. In the latter case, the nitrogen has to be removed to the level of pipelinespecification, using expensive nitrogen rejection processes. For LNG production via theTASHER, the nitrogen is expected to pass mostly uncondensed through the unit withoutcausing major operational problems. This uncondensed gas (which will also contain somemethane) can be used as a portion of the fuel gas firing the TASHER.

However, if the oxygen is not removed prior to introduction of CMM to acryogenic unit, it must be shown that it will not pose a significant safety problem to theentire gas conditioning system. To illustrate that this will not be a problem, the followinganalysis is provided. Equilibrium data for the nitrogen - methane system are available (7).It is also possible to compute the equilibrium conditions by using Raoult's Law. Figures12 and 13 show the comparison of the two sets of data for a given temperature. (It ispossible to carry out these calculations for other temperatures, and this has been done.)

38

C O M P A R I S O N O F E Q U I L I B R I U M D A T A A N D R A O U L T L A W

C A L C U L A T I O N F O R N I T R O G E N - M E T H A N E S Y S T E M A T -

162 .2 DEG C

0

2 0

4 0

6 0

8 0

100

120

0 2 0 4 0 6 0 8 0 100

L I Q U I D M O L % N I T R O G E N

G A S M O L %

N I T R O G E N

Figure 12 Comparison of Equilibrium data and Raoult's Law for CH4 - N2 system

COMPARISON OF EQUIL IBR IUM DATA AND RAOULT LAW

C A L C U L A T I O N F O R N I T R O G E N - M E T H A N E S Y S T E M A T -162 .2 DEG C

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 0 100

M O L % N I T R O G E N I N L I Q U I D P H A S E

Figure 13 Comparison of Equilibrium data and Raoult's Law for CH4 - N2 system

Examination of the graphs shows a very good agreement between the calculationand the experimental data for nitrogen (liquid) (Figures 12 & 13) contents below about20%. This is of course, the region of interest.

39

Temperature Pressure N2 O2 CH4

(deg C) mmHg (mole%) (mole%) (mole%)Case 1 -168.8 708Liquid .026 .017 .957Vapor .390 .069 .541

Case 2 -161.5 1297Liquid .028 .017 .955Vapor .373 .068 .560

Table 6 Calculated Equilibrium Conditions for Ternary CH4 - O2 - N2 System

Table 6 shows the results of calculations based upon Raoult's Law for the ternarysystem, Nitrogen, Oxygen and Methane, for two temperatures, -168.8 deg C and -161.5deg C. While the more volatile Nitrogen and Oxygen tend to concentrate more in thevapor phase, the ensuing composition is still more than 50% methane and less than 7%Oxygen, which is well above the rich flammability limit. In case 1 the methane to oxygenratio is 7.96; in case 2, this ratio is 8.24. For methane in oxygen, the higher explosivelimit is 1.4; for methane in air, the higher flammability limit is 0.2.

So it can be seen that the Oxygen and Nitrogen, at concentrations such as shown inTable 6, should not provide a flammability problem in the TASHER.

In practice it should be relatively straightforward to carry out this concept. This isillustrated in Figure 14. The effluent from the refrigeration section of the TASHER willenter a storage tank, at a location near the bottom. Uncondensed (or undissolved) gaseswill bubble through the liquid contents of this tank and exit through a vapor release valveat or near the top of the tank. This vapor will be in equilibrium with the liquid. Bymaintaining the release valve at a pressure of (say) 25 psig, corresponding to the solutiontemperature of -161.5 deg C, the exiting vapor will have the composition given in Table 6,while the liquid will have the corresponding liquid composition given in the table.

The vapor, well above the rich explosive limit, will be mixed with other gasstreams that will be even richer in methane and combusted in the TASHE section of theTASHER. The liquid will be withdrawn from the tank and sent to market. Since the LNG(solution) can only become warmer, any vapor that escapes further from the solution willbe even richer in methane than the mixture used in the combustor (the composition givenin Table 6), and be even further beyond the rich explosive limits.

40

LNG LIQUID

VAPORREFRIGERATIONSECTION OFTASHER

VAPOR OUT TOCOMBUSTOR

LIQUIDOUT TOMARKET

Figure 14 Illustration of Removal of LNG and Uncondensed Gases from TASHER

6.2.3 Oxygen Removal Process

The proposed project plans, therefore, to avoid the costly removal of oxygen andnitrogen and the further removal of the Oxygen reduction products, CO2 and H2O, whichare required in order to avoid the formation of solid products (ice and dry ice) in therefrigeration unit. This can be made possible by maintaining the refrigeration temperatureat such a level as to liquefy most of the methane, but allow the methane partial pressure tobe at such a level, that the uncondensed methane forms a mixture with the oxygen that isabove the (high) explosive limit for methane in oxygen. This concept is illustrated inFigure 15.

INLET PROCESS CMM

LNG

AIR

INLETFUELCMM

UNLIQUIFIED CMM(CH4 AND O2,BEYONDFLAMABILITYLIMITS)

Figure 15 Removal of Oxygen from the inlet CMM can be avoided, if certainprecautions are taken.

41

However, the presence of oxygen may pose other problems for certain of the gasconditioning processes. When molecular sieves are used, the regeneration isaccomplished by heating the bed while passing a stripping gas (at a lower pressures,perhaps, that used during adsorption) through the bed. This stripping gas must be free ofCO2 and H2O. Even the presence of O2 may be disallowed, because it could combust withsome of the methane while being heated for the regeneration cycle. If this is the case, acatalytic reduction unit will have to be installed prior to the mol sieve unit – see Figure 16.

COOLER

CATOXUNIT

TOREFRIGERATION

CMM

ADSORBINGBED

REGENERATINGBED

FUEL GAS

Figure 16 Block diagram of Gas Conditioning System using Molecular Sieves

The flow scheme in Figure 16 represents several awkward process features. Theamount of heat released in the catalytic reduction unit is sizable, and the unit itself may bequite expensive. The whole reason for the reduction is to permit the regeneration gas tobe oxygen free. With this in mind, it may be possible to reduce catalytically only thatportion of the CMM stream, which is used for regeneration, Figure 17. This allows thecat-red unit to be much smaller (4). However, there is still the need for the gas streampassing through the regenerating bed to provide the heating necessary for regeneration.This may require this stream to be a large fraction of the feed.

In many mol sieve applications, there is a use for this stream. Often, this gas issent to a pipeline (as in the top case shown earlier in Figure 9) or it can be used as a fuel.While the present project has some need for fuel gas, it is not clear that there is a

42

convenient match between the gas required for regenerating the mol sieve beds and thefuel demand of the TASHER.

A1 R1

CATOX

CVCOOLER

HEATER

A2

R2

HEATER

LNG STORAGE

TASHER

CMM

12

3

4

5

6

7 8 9

10

12

13

9A

11

16 1520

19

Figure 17 Alternate Block Diagram of Gas Conditioning System UsingMolecular Sieves

So it would appear that the project might be best served by a gas conditioningfacility in which regeneration is accomplished without the need to use a considerableportion of the feed gas. However, this conclusion may not be entirely correct if thepurification levels of absorbing systems prove to be inadequate or if there is a markedchange in gas composition from the base case considered here. There is a definite need tostudy the problem further and to conduct field tests with the small TASHER prototype(500 gpd PDU) scheduled for operation later this year.

43

7.0 Technical Description of Project

7.1 Overall Process Diagram - Heat and Material Balances

Based upon the general discussion provided in the previous section, the overallprocess flow diagram for the process is provided in Figure 18. A molecular sieve unit, inand of itself, is not able to provide sufficient conditioning for a CMM of the compositionof the Cumberland/Emerald mine gob gas discussed earlier (5).

The raw CMM is compressed to system pressure and cooled to the inletspecification for the DEA process. The project team proposes the SNPA version, aprocess schematic of which is given in Figure 19. The sweet gas is then sent to a Drizodehydration unit, which is shown in schematic form in Figure 20. It may be necessary tocomplete the CO2 and H2O removal with a mol sieve unit, but such a unit is not providedfor at this time. It may also be necessary to remove oxygen. This provision is notincluded here either, but technical and cost information continues to be assembled.

CMM

COOLER

DEAUNIT

LNGSTORAGE

TASHER

AIRFLUEGAS

FUEL GAS

VENTVENT

DEHYDRATIONUNIT

1

23

4

5 6

7

8

9

10

11

12

13

14

15

16

Figure 18 Proposed Project Flow Diagram

44

Table 7 provides a heat and material balance for the system depicted in Figure 18.

STREAM COMPONENT: CH4 N2 CO2 O2 H20 TOTAL TEMP(DEG K)

PRES(PSI)

1 SCFD 1242686 114284 6833 0 13709 1377512 294 14.7KBTU/D 0 0 0 0 0 0

2 SCFD 1242686 114284 6833 0 13709 1377512 620 600KBTU/D 20595 1271 110 0 179 22155

3 SCFD 1242686 114284 6833 0 13709 1377512 294 600KBTU/D 0 0 0 0 0 0

4 SCFD 1118417 102856 0 0 12338 1233611 294 600KBTU/D 0 0 0 0 0 0

5 SCFD 0 0 6833 0 0 6833 294 20KBTU/D 0 0 0 0 0 0

6 SCFD 124269 11428 6833 0 1371 143901 294 600KBTU/D 0 0 0 0 0 0

7 SCFD 1006576 92570 0 0 0 1099146 294 600KBTU/D 0 0 0 0 0 0

8 SCFD 0 0 0 0 12338 12338 294 20KBTU/D 0 0 0 0 0 0

9 SCFD 1006576 92570 0 0 0 1099146 250 30KBTU/D -1681 -134 0 0 0 -1815

10 SCFD 1006576 92570 0 0 0 1099146 112 30KBTU/D -15295 -534 0 0 0 -15829

11 SCFD 825392 25528 0 0 0 850920 112 30KBTU/D -12542 -147 0 0 0 -12689

12 SCFD 181184 67043 0 0 0 248226 112 30KBTU/D -1076 -386 0 0 0 -1463

13 SCFD 181184 67043 0 0 0 248226 250 30KBTU/D -303 -97 0 0 0 -400

14 SCFD 305452 78471 6833 0 1371 392127 294 30KBTU/D 0 0 0 0 0 0

15 SCFD 0 2757797 0 733085 0 3490882 294 30KBTU/D 0 0 0 0 0 0

16 SCFD 0 2836268 312285 146617 612275 3907446 294 30KBTU/D 0 0 0 0 0 0

Table 7 Heat and Material Balances for Project

45

46

47

An alternative to the configuration shown in Figure 18 is provided in Figure 21and is worth a brief discussion. If the CMM that is finally used in the project is really freeof oxygen, then it would be possible to treat it with a less sophisticated DEA and glycolsystem, followed by a final clean-up with a molecular sieve unit. (Again recall that if theCO2 content is relatively high e.g. >1%, a molecular sieve unit alone would not be able tohandle the job.)

This concept is illustrated in Figure 21. As in the previous discussion, CO2 andwater will be removed by standard DEA and Glycol removal systems. This will lower theCO2 and water content of the gas to levels that are appropriate to mol sieve treatment.This system could be cheaper to build and to operate than the previous one, and it is notcompletely ruled out at this time.

CMM

COOLER

DEAUNIT

LNGSTORAGE

TASHER

AIRFLUEGAS

FUEL GAS

VENTVENT

DEHYDRATIONUNIT

1

23

4

5 6

7

8

9

10

11

12

13

14

15

16

7A

A1R1

HEATER

MOLECULARSIEVE UNIT 7B

7C

7D

Figure 21 Alternative Gas Conditioning System, Showing the Addition of a Molecular Sieve Unit to Provide a Final Toning to the Conditioned CMM.

48

7.2 Description of individual processes

7.2.1 TASHER

One of the proposed uses for CMM is as a feed source for an LNG plant. Theliquefaction of CMM to Liquefied Natural Gas (LNG) for use in the transportation sectorhas emerged as a viable opportunity. A low cost, highly efficient liquefier is beingdeveloped by researchers at Los Alamos National Laboratory (LASL) and Cryenco. Thebasic feature of this unit is a Thermo-Acoustically Driven power source, which drives therefrigeration cycle involving an Orifice Pulse Tube Refrigerator (TASHER). Cryenco isdeveloping this technology for liquefying natural and industrial gases.

The TASHER appears to offer low capital and operating costs at small scale (ca.10,000 gal/day) and would be an excellent fit with the needs of CMM projects, promisingto produce LNG from appropriate CMM sources at selling prices that will be competitivein the transportation market as well as for on-site gas storage requirements of CMMelectric generators.

The TASHER consists of a thermal driver and pulse tube orifice refrigerator. Theenergy for the thermal driver is provided by the combustion of a fuel such as natural gasor CMM. The specs on this fuel would be similar to those for any combustion device.

The TASHER has been described generally in Section 6.1.

A schematic, provided by Cryenco, of the 10,000 gal. per day unit, is shown inFigure 22.

A more detailed schematic, also provided by Cryenco, of the new recirculationloop is given in Figure 23.

Figures 23a and 23b provide illustrations of the core concepts for the thermalacoustic driver and the orifice pulse tube refrigerator, respectively.

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50

51

Thermoacoustic Driver

• Burner provides power toHot heat exchanger

• Stack transfers heat intoAnd out of the heliumWorking gas

• Ambient heat exchangerRejects heat to water

• System produces and Oscillating Pressure wave

Figure 23a

Ambient Heat

Exchanger

Hot Heat

ExchangerQ•

Stack

Resonator

λ/2λ/2

Q•

52

Orifice Pulse Tube Refrigerator

• Variation of stirling refrigeration cycle

• Working gas is expanded and

• compressed in the Pulse Tube

• Orifice/Reservoir System Causes Correct Phasing Between Pressureand Mass Flow Which Produces Refrigeration Power

• Regenerator Provides Thermal Isolation Between Driver And ColdHeat Exchanger Figure 23b

Reservoir

ThermoacousticDriver

Orifice

Heat Exchangers

AftercoolerRegenerator

Pulse

Tube

Heat Out

Natural Gas

Heat Out

LNG

53

7.2.2 Gas Conditioning System

CMM would be provided from one or more sources to the Gas Conditioning unit,which would condition the gas to acceptable specs for the process side of the TASHER.The CMM would also be provided as fuel gas to the TASHER combustor and the powerunit. In the TASHER combustor, the CMM fuel gas would be burned with air, creating ahot (200-300 deg F) flue gas. Some or all of this flue gas, discharged from the TASHERcombustion chamber, could be recycled to the Gas Conditioning Unit to regenerate spentsorbents. Similarly, the CMM fuel gas and air that combust in the power generation unitswould also create a hot flue gas that could be used as a waste heat source for either theTASHER or the gas conditioning unit.

The CMM, conditioned to meet TASHER specs, would be supplied to theTASHER as process gas, where it would be converted to LNG, stored and shipped tomarket. The cooling requirements of the TASHER will be provided by cooling water,which is cooled on site by means of a cooling tower.

At this time the project does not show a cat-red unit nor a molecular sieve unit.The team plans a field test on the 500 gpd prototype to verify that these will not beneeded. However, discussions have been held with Catalytica (2), and they haveinformed the team that they do not market a catalytic-reduction unit. But they havefurther informed the team that it should not be difficult to develop such a unit, and theywould be pleased to undertake such an effort should that be desirable for the project.

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8.0 Project Site

Maps of the project area are provided on the following pages. Pittsburgh coalseam base elevations and mined out areas of the Consolidated No. 9 mine are identifiedin Figure 24. While Invitation Energy's host site, the Whetstone portal is indicated on themap, most, if not all, of the feedstock coal mine methane will be delivered to theTASHER by pipeline from adjecent mines.

Figure 25 is a map which delineates the topographic conditions in the immediateproject area. Given the surrounding hillsides, special care will be taken to assureadequate drainage away from the demonstration site. Effective storm water managementis essential to ensure that there is no interference with project operations and to avoiddraining any waste products from the site to surrounding property or a nearby stream.

The last in the series of figures (#26) illustrates the underlying rock formations atthe project site. Data for this illustration was compiled by the West Virginia GeologicalSurvey from actual core samples near the project area.

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56

57

500’

400’

300’

200’

100’

0

559' - 569'3"

519'2" - 520'3"

489' - 489'10"

456'6" - 462'

173'5” - 177’4"

Surface elevation 1060'

TD 573'Pittsburgh coal, 10'3"; main seam 8'3" (561'-569'3")

Redstone coal, 1'1"

Fishpot coal, 10"

Sewickley coal, 5'6"

Limestone

Waynesburg coal, 3'11"

Cored August 16-24, 1938John C. Myers FarmPlum Run Hole #6

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8.1 Demonstration Project Utility Requirements, Plot Plan, Installation, Permitting and Financial Considerations

8.1.1 Utilities Required for a 10,000 gpd TASHER demonstration

Cooling water

TASHER - 1.5 to 3 megawatts of cooling water required. (Est. by Cryenco.)

Gas conditioning - 900,000 BTU/hr for CMM cooler (followingcompression,

if compression is required/selected)

Fuel Gas - 250MCFDMethane for combustion section of TASHER

Electric power (or equivalent)

- 189 kW for compression of CMM

- 15 kW for TASHER combustion blower

- 15 kW for water circulation pumps

8.1.2 Plot plan for the LNG demonstration equipment (See Figure 27)

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8.1.3 Alternatives for Siting the Plot Plan at Invitation Energy's Whetstone Portal

There are five possible sites surrounding the office building that are flat and readyto use, but two of these sites are more suited to the project's needs than the others.Pictures of each site can be seen in the following pages, and a sketch of their relativelocations can be seen in Figure 28.

Consultations with the WV Geological Survey indicate that the subsoil in theproposed area is composed of limestone and shale (Dunkard formation) with seven tofifteen feet of clay loam soil (Meigs). Drainage is considered good to excellent at eachsite, although some portions (which will not be used) of the overall site are within a 100-year flood plain.

Picture-1 shows the road that runs behind and to the left of the office building.Site-1 can be seen on the left side of the road and is occupied by pipes, beams, and an oldtruck. The dimensions of this narrow site are approximately 50 ft x 400 ft and it iscapable of supporting some large equipment. This site is not large enough for all of theequipment needed for the LNG process, but it could be used for offices or parking, orcombined with other sites. There is a hill beside site-1, seen on the left side of Picture-1,which limits its use. Removing a portion of this hill is not recommended due to the threatof sedimentation of nearby streams.

Behind the office building is the largest flat area, Site-2, which is approximately60 ft x 400 ft. This site can be seen in Picture-2, covered with several drill pipesegments. Site-2 can support all of the equipment needed, with minimal changesnecessary. A level 1 survey indicates no significant hazardous material clean-up issues;and, if needed, the hill to the left can be flattened to extend the width of the site. Inaddition, the area between the office and Site-2 contains old mining equipment that canbe removed to increase the dimensions of Site-2, but is not recommended because thecost of this clean up will likely be high. The existing flat area should be large enough toaccommodate all of the planned equipment, but expansion is possible should it becomenecessary. There are presently entrances at both ends of Site-2 that will facilitateconstruction and, subsequently, operations including the transfer of stored LNG to largetanker trucks for delivery to customers. This seems to be the most desirable location toset up the equipment.

Site-3, shown in Picture-3, is a small fenced area south of Site-2. The site isroughly 30 ft x 50 ft. It would require extensive clean up and is too small to hold all ofthe equipment. It might be useful as a possible expansion option for Site-2. In betweenSite-2 and Site-3 there are a few oil drums, seen in Picture-4, that will need to beremoved in order to connect the sites.

Site-4 is located on top of the hill seen in Picture-4. There is a large, flat areawhere the equipment can be set up, but access to this site is constrained due to the steepgrade of the hill. This is a less desirable location.

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Picture-5 exhibits a view of Site-5, Invitation Energy's parking lot. The parkinglot has dimensions of approximately 100 ft x 170 ft and is adequate for all of the plannedequipment. While access to this site is excellent, it is deemed less desirable due to itsclose proximity to the road and the possibility of unwanted curiosity.

Stormwater management is a concern for the preferred site, 1 and 2. To avoiddamage, the equipment must be set up in an area that does not flood. The two sites arelocated in a valley, which likely receives much runoff during storms. There are drainageditches and pipes below all three sites to help assist with excess runoff. These drainageareas can be seen on both sides of the road in Picture-6. Sites-1 and 2 are elevated abovethe road to help the flow of runoff into the drainage areas. However, it is evident fromthe muddy entrance to Site-2, seen in Picture-6, that the drainage areas do not effectivelyremove all of the runoff. This problem might be corrected by simply putting down moregravel and improving the existing stormwater channels.

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63

64

65

66

67

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8.2 Cost Estimates and Evaluations for Site Preparation

Site-2 is the most desirable location for many reasons. It is large enough to hold all ofthe equipment, it will require minimum clean up, it is easily accessible, and it is not clearly visiblefrom the road. Of course though, there will be some costs to prepare this site. Cost estimatescan be seen below in Table-8.

Table-8

C o s t E s t i m a t e s f o r S i t e P r e p a r a t i o n

T a s k C o s t ( $ )R e m o v a l o f d e b r i s 1 , 0 0 0C o n c r e t e , m a t e r i a l 7 , 5 9 0C o n c r e t e , l a b o r 5 , 0 0 0S u p l i m e n t a l m a t e r i a l s 1 0 , 0 0 0C r a n e ( 3 d a y s ) 4 , 6 8 0E q u i p m e n t i n s t a l l a t i o n , l a b o r 1 0 , 0 0 0F e n c e , m a t e r i a l 3 , 0 0 0F e n c e , l a b o r 7 5 0S i t e d r a i n a g e i m p r o v e m e n t s 1 0 , 0 0 0T A D O P T E R t r a n s p o r t a t i o n 2 , 5 0 0O t h e r t r a n s p o r t a t i o n 2 , 0 0 0C o n s t r u c t i o n o f o f f i c e 2 0 , 0 0 0

S u b t o t a l 7 6 , 5 2 0C o n t i n g e n c y ( 2 5 % ) 1 9 , 1 3 0T o t a l 9 5 , 6 5 0

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Cleaning the area of debris will not be expensive because there is only a smallamount of material to move and it is not toxic or hazardous. This material can betransported by a small truck, such as the one seen in Picture-5, and moved to Site-1 oranother area close by. The cost of this work should be insignificant to the project.

Some concrete will be required to form a stable pad for the TASHER. The padshould be eighteen inches thick, halfway buried into the ground to dampen the vibrationsfrom the TASHER and provide stabilization. The pad should have an area ofapproximately 15' x 15' to distribute weight over the soil and provide sufficient room forstabilization cables and bolts. The maximum amount of concrete needed including amargin for contingency will be 14 yd

3. The cost of the concrete used will be

approximately $69 yd3, resulting in a cost of $966. The cost of labor to lay down the

concrete pad will be approximately $2,000. Additional concrete pads might be neededfor other pieces of heavy equipment such as the cooling tower and the storage unit. Thiswill increase the total concrete needed to 110 yd

3, the total cost to $7,590, and the total

labor cost to approximately $5,000.

Supplemental materials, such as supporting cables and bolts, are necessary tostabilize the TASHER in heavy winds. The costs of these materials are estimated to be$10,000.

Equipment such as cranes and large trucks will be needed to set up the TASHERand individual units. The cost to rent a crane with operators for eight hours a day is$1,560. The crane will be needed for approximately three days, considering that all thepieces of equipment will not arrive on the same date. Additional rental equipment andlabor needed to install each piece is estimated to cost $10,000.

A fence as well as two gates will be needed to secure the area. The cost ofmaterials to set up an eight foot galvanized chain link fence with a top rail around site-2is approximately $3,000. The cost of labor to erect the fence is approximately $750.

There will also be costs for transporting the equipment to the site. The TASHERwill require large trucks and special attention when transported. The cost of moving itfrom Denver to Mannington will be about $2,500. The cost of transporting the coolingtowers is included in their net cost as shown in the quotation from CFM. Thedehydration and DEA units for the gas conditioning plant as well as materials for theoffice and storage space will also need to be transported. The estimated costs for this are$2,000.

There will be costs for construction of the office. Labor and materials areestimated at $20,000.

The total cost of site preparation, including 25% added contingency, comes to$95,650.

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8.2.1 References for Cost Estimates of Site Preparation

Concrete:Concrete - Ready Mix:

Arrow Concrete Company; Rt. 5, Morgantown; (304) 291-6211

Concrete Contractors:Morgantown Landscapers, Inc.; Morgantown; (304) 296-8000

Fences:Fences 4 Less; www.fences4less.com 1(800) 933-6237

Cranes:City Crane and Equipment, Inc.; Dents Run Blvd., Morgantown; (304) 292-5438

Trucking:Estes Express Lines; Richmond; 1 (800) 624-7881 ext. 2269; Quote # T3000024/7 Freight; New Jersey; 1(800) 672-7204

8.2.2 Description of Site Layout

The proposed layout of the project equipment on Site-2 is seen in Figure 27. Thegas conditioning plant is likely to be set up before anything else so it should be placed inthe middle, away from the entrances. The office and controls can be built south of thegas conditioning plant and close by so the plant can be easily monitored. The TASHERmust also be monitored so it should be close to the office and controls as well. It can beplaced near the south entrance with nothing except the storage area built within 40 feet ofthe TASHER to establish an access and safety perimeter. This is a good location for theTASHER because there is sufficient room in the south entrance for a crane to be used toset up the TASHER. A concrete pad, 15 ft x 15 ft and 18 inches thick, should be set inplace here two weeks before the TASHER is delivered so that the concrete has time tocure. The storage tank must be built close to the TASHER so that the LNG does not haveto travel far from the system. A good location for the storage tank is between theTASHER and the office, within the 40-foot safety area. The cooling tower does not haveto be particularly close to the rest of the equipment, so it can be placed on the north endof the site close to the smaller entrance area.

The layout of the equipment can be rearranged to accommodate the delivery ofcomponents to the site in a different order, for example if the TASHER arrives before thegas plant components. If a rearrangement is necessary, certain aspects of the layout muststill be observed. Both the gas plant and the TASHER should be close to the office andcontrols. The TASHER should have a 40-foot clear working area and safety radiusexcluding the storage tank, which must be nearby. Also, the TASHER must be installedfrom the south entrance where there is room to install it, so nothing should be built nearthis entrance until the TASHER has been erected.

71

After all of the equipment has been installed, an eight-foot galvanized chain-linkfence should be placed around the perimeter of the site. Two gates, wide enough to allowthe large LNG tanker trucks to get through, should be installed at each entrance.

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9.0 Financial Analysis

9.1 Capital and Operating Cost Estimates

9.1.1 Capital Cost Estimates

$7.4 million is estimated to be the capital cost that would be incurred by allparties to the project, including costs to the State of West Virginia through the $50,000per heavy vehicle tax incentive program. $4 million of this amount represents theestimate associated with the state's cost sharing contribution. An additional $3,431,250for project-specific capital costs such as site preparation, the TASHER unit, gasconditioning equipment, and LNG storage and distribution equipment would be shared byDOE and the project sponsors.

9.1.2 Operation and Maintenance Cost Estimates

The operating costs for the project have been estimated, and are provided in Table10. The cost for the CMM has been taken to be $2/MCF and the ratio of combustion gasto process gas for the TASHER and other process heaters is taken from the heat andmaterial balances provided in Table 7. There is provision for three operators per day.Operating costs for the gas conditioning unit have been taken from the factored estimatesof Purvin and Goertz. The operating cost estimate is about one-and-one-quarter milliondollars a year. The two-year project total is $2,587,630.

A summary of all project costs are reflected in Table 12 below.

TOTAL PROJECT 10,018,879STATE (Est. of Tax Credit) 4,000,000

TOTAL DOE 2,950,000

DIFFERENCE (PAID BY PROJECT) 3,068,879

Table 12 Total LNG Demonstration Project Funding(Two year operating Life)

Further details of the project financing are provided in Tables 9, 10 and 11 and ina narrative presentation contained in Appendix 9. These are provided solely for DOE'sinformation under confidentiality instructions.

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10.0 Market Survey and Analysis of Demonstration Project LNG Sales Issues

10.1 Market Survey in Northern West Virginia and Southwestern Pennsylvania

10.1.1 Introduction

Previous research has demonstrated the feasibility of using LNG as atransportation fuel in certain types of vehicles. Vehicles most amenable to using LNGare those found in high fuel use fleets, particularly fleets that consist of larger vehiclesthat can more easily accommodate the cryogenic fuel storage tanks required for LNG.Since the energy density of LNG is less than diesel or gasoline, LNG vehicles must storemore fuel on-board in order to have a driving range that is equivalent to that of diesel orgasoline powered vehicles.

While large LNG fueled vehicles typically can travel in excess of 350 highwaymiles without refueling, this market study was limited to heavy vehicle fleets whosevehicles that return to "home base" at the end of their daily cycle and travel less than 250miles per day. The 250 mile daily limit was chosen to ensure a very conservativedetermination of potential market size and does not represent an actual LNG vehiclelimitation. Consequently, the numbers of potential LNG vehicles identified hereinrepresent only the "lowest hanging fruit" and considerably understate the early candidatemarket.

A survey was conducted of fleets comprised primarily of large (i.e. Class 7 & 8)vehicles within a 100 mile radius of the Morgantown area. This region includes much ofthe I-79 Clean Corridor which is supported by FETC, DOE's Office of Energy Efficiency,the States of West Virginia and Pennsylvania and private fleet operators and fuelproviders.

10.1.2 Background Data

The following points and Table 13 list properties of LNG for reference purposes:

• LNG weighs less than half as much as the same volume of water. Water (8lb/gal); LNG (3.5 lb/gal). Weight comparisons for diesel fuel and gasoline are7.3 lb/gallon and 6.2 lb/gallon, respectively.

• One (1) ft3 of LNG is equivalent to approximately 618 ft3 of natural gas interms of contained energy.

• One pound of LNG contains 22,400 Btu, compared to diesel fuel at 19,200Btu/lb and gasoline at 20,300 Btu/lb.

• Btu per gallon volume is 78,400 for LNG, 140,160 for diesel and 125,860 forgasoline.

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• During liquefaction of natural gas, or other LNG feedstock such as coal minemethane, any mercaptan, condensable carbon dioxide, water and other tracecomponents such as hydrogen sulfide are removed.

• The natural gas is passed through a series of refrigeration steps to reduce thetemperature to -259° F, which liquefies the gas. The major contaminantscondense at various temperatures throughout this process and the majority ofthe contaminants are drawn off.

• Result: 90 - 100 % methane in the liquid form (LNG), with the remainingcomponents of ethane, propane, nitrogen and/or helium at 0 - 10%. (For thepurpose of this study, only LNG which is > 97% methane will be consideredtransportation grade fuel.)

• Methane has a relatively simple chemical composition and is the onlyhydrocarbon that does not photochemically react to form ozone and, due to its"cleanliness," results in an ambient reduction in particulates and otheremissions.

• CNG can be produced from LNG.

CNG LNG DIESEL GAS PROPANE

PhysicalState

Gas Liquid Liquid Liquid Liquid

StoragePressure(PSI)

3000-3600 40-200 ATM ATM 120-160

Temp. ( °° F) Ambient -259F Ambient Ambient Ambient

Density(Lb./gal)

1.3-1.6 3.5 7.14 6.2 4.8

EnergyContentBTU/gal

120,000 82,000-85,000 128,000 -135,000

117,000-125,000

91,700

Table 13 Fuel Properties Comparison (Source: ALT Brochure 1998)

10.1.3 Background, LNG Equipment Cost and Use

Producers of LNG vehicle technologies have managed to reduce the costs of theirproducts significantly over the last four years, according to the Zeus Development report.The incremental costs of heavy-duty LNG tractors and transit buses from companies such

75

as Mack, Cummins and Caterpillar have dropped by approximately 50-60%, from$50,000 - 60,000 down to $20,000 - 35,000.

The West Virginia Legislature passed a bill that pays the costs to convert diesel orgasoline engines to LNG or the incremental cost to purchase alternatively-fueled new,OEM equipment. This incentive eliminates direct conversion costs to fleet owners.(Additional details of the WV tax credit are contained in Appendix 4.) The currentlegislation providing this subsidy incentive for LNG conversion expires in 2008. Thismarket evaluation recognizes the importance of this legislation and its possibleimplications after it expires in 2008.

The only current use of LNG for transportation in the survey area is ademonstration project at Waste Management's Washington County landfill operation.This project is supported by DOE's Heavy Vehicle Transportation Program in the Officeof Energy Efficiency and the Gas Research Institute. Waste Management employs sevenMack heavy-duty dedicated LNG engines in the 325-350 horsepower range. A 400horsepower dedicated natural gas engine is currently in development. These power systems can be integrated into either a refuse or highway vehicle.

10.1.4 Survey Design

This market survey is for a new LNG production facility, the TASHER, to beconstructed near Morgantown, West Virginia. Since transportation adds considerably tothe delivered price of LNG, LNG would have the greatest competitive advantage relativeto diesel in markets near the LNG production facility. Therefore, the market area for thisstudy was roughly limited to a 100-mile radius of Morgantown.

The SIC code (WV Business Directory) was used as an indicator for the size ofthe fleet. Although fleet or vehicle size was not referenced in this directory the employeesize was used as an indicator. Fleets with employee size greater than 20 were chosen forthe survey as a possible indicator of fleet size.

The West Virginia Business Directory and local telephone directories for theMorgantown, Fairmont, and Clarksburg areas were used to identify fleet operators. TheWV Business directory and phone books were the primary source as well as networkingonce a contact was established during the survey.

10.1.5 Survey Results

The market survey of all potential users of LNG in the market area indicates thatconsiderable uncertainty is involved in the forecast demand for LNG. This uncertainty isdue to (1) unknowns concerning the overall potential growth of vehicular fuel in themarket area, (2) the potential for converting a portion of overall fuel requirements toLNG, (3) the percentage of the potential fuel market that could reasonably be captured,and (4) the rate of market capture. A LNG market forecast must consider these inherentuncertainties. Consequently, ranges of market demand quantities are obtained andanalyzed rather than discrete quantities.

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Figure 29 shows the high, medium, and low values for the total potential marketfor LNG assuming small increases in the overall level of fuel use in the Morgantownarea. The indicated market for LNG in the Morgantown, West Virginia area over the nextfifteen years ranges from 2.3 to 8.1 million gallons of LNG per year (high and low cases).The medium case indicates a market for about 4.2 million gallons of LNG per year.Deviations from the assumed values previously described could change the size of themarket. The wide range between the high and low values indicate the present uncertaintythat exists in determining a market for LNG in which neither the cost of LNG, the cost ofusing LNG, or the prices of diesel are known with certainty.

Potential LNG Market with Fuel Use Growth

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

0 5 10 15

Years

Mill

ion

GP

Y L

NG

High

Medium

Low

Figure 29 Potential LNG Market with Fuel Use Growth

Further details of the market study are contained in Appendix 11 which isprovided solely for DOE's information under confidentiality instructions.

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10.2 Regulatory Issues

10.2.1 Regulatory issues for the Construction and Operation of a 10,000 gpd TASHER in Marion County.

Due to the unusual nature of this project inquiries to the officials of MarionCounty for clarification on regulator issue related to construction and operational of theTASHER were met with more questions than answers. Due to their general unfamiliaritywith LNG and the specifics of the project itself, it will be necessary to meet periodicallystate and local regulators to “bring them along” as the project evolves. It will benecessary to provide the County with explicit plans of the TASHER site includingequipment to be used at the site for their review and approval. They will require theproject to follow typical BOCA construction regulations along with State and NationalFire Code and OSHA directives where applicable. None of these requirements are asurprise or out of the ordinary for a new site/structure construction and utilization. Localregulators appear prepared to work cooperatively with us to assure this project stays inMarion County. Since the county inspectors and planners have had the experience of theconstruction of Three CNG refueling stations by Hope Gas Company with considerablehigh pressure storage capacity, their expressed comfort level toward the proposed LNGproject is comforting. Project personnel also used the typical LPG storage anddistribution scenario, which the regulators were familiar with, as an aid in helping themappreciate that the LNG production and distribution project is similar to processes thatthey may have already seen and have dealt with. However, continuing educationalefforts will be necessary before any applications for permits are submitted to the Countyofficials.

10.2.2 Regulatory Issues Associated with Transporting LNG Through theFairmont Area, Marion County, and Neighboring Counties and States.

Transportation issues appear to be the easiest to address. All States involvedutilize their specific Departments of Transportation to regulate trucking in theirindividual states. The project will be required to supply each DOT with documentationthat the vehicle in use has been constructed for the task in which it is being used. Thevehicle must also pass a state safety inspection for the state in which the vehicle islicensed and registered. Once this is accomplished the application to the various statesinvolved may be completed and a state transportation licensee for the vehicle will beissued. Additionally, the driver(s) of this vehicle must possess the appropriate CDLlicensing for the materials being transported.

The City of Fairmont has no specific regulation that would prevent the projectfrom transporting LNG through the city, the only limitation being weight restrictions onthe various bridges around the city. These can be addressed adequately with the route inwhich the transport vehicle will be required to follow.

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10.2.3 Regulatory issues relating to Distribution from a Mobile RefuelingStation in WV and Neighboring States.

Distribution from a mobile unit may have some issues that will require specificattention once the decision has been made as to which type of fuel sale actually will bemade from the truck itself. There appear to be significant differences as far as variousstates are concerned between bulk transportation of the LNG and bulk wholesaledistribution of the LNG versus bulk transportation and retail mobile dispensing. The mainarea of concern is with the responsibility to the individual States and the FederalGovernment for the specific excise taxes, road usage taxes, state and local fees and taxesand sales taxes, etc. that will need to be assessed to each “retail” sale. The project teamwill need to assume responsibility for this submission to each local, state or federal entity.However, if our customers make bulk fuel purchases, the responsibility for the majorityof these taxes and fees and their submission will fall directly on that individual end useror retailer. Many companies are currently transporting various fuels to clients anddispensing them into individual vehicles yet invoicing the total fuel purchased as a bulkpurchase. This procedure also eliminates the complexity of securing in each state theWeights and Measures official's initial certification and annual licensing of the specificretail dispensing devices being used. Having dealt directly with this issue and havingrealized it’s challenges and expense, project personnel would suggest avoiding it if at allpossible.

An additional area to be researched is the responsibility the project will have tothe remnants of the Interstate Commerce Commission when state lines are crossed to sellthe LNG. Compliance with these responsibilities will require a significant investment intime.

10.2.4 Regulatory Issues Related to the Use of LNG in Vehicles

At this time there are no significant issues related to the actual usage of LNG as amotor fuel on the highways across the United States. Both the EPA and the DOE haverecognized LNG as a viable Alternate Fuel thereby giving it equal viability when used inthe transportation sector.

The new EPA Alt Fuels conversion equipment emissions requirements may be aregulatory issue that could have indirect effects on this program. These regulations mayinhibit market development to the extent that initial clients may prefer to convert existingdiesel and gasoline vehicles to LNG. By combining existing conversion systems withcurrent OEM offerings there should be an adequate selection of LNG conversions andengines for clients in the project's area. (In any event, the market studies presentedearlier in the report are premised on the conservative assumption that only OEMequipment will be utilized by LNG customers of the project. Consequently, the marketstudy assumes relatively slow market growth projections, much slower than may actuallybe realized.)

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10.3 Marketing Strategy for Duration of Demonstration Project and Subsequent Commercial Sales

Details of the project's strategy to market LNG are contained in Appendix 10 andare provided solely for DOE's information under confidentiality instructions

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10.4 Commercial Potential

The project itself has a marginal profitability, depending upon the CMM gaspurchase price, the efficiency and reliability of the TASHER and the sales price of theLNG. The financial return's sensitivities of to these parameters are shown in Figure 30.Notice that for the project to break even during the period of DOE funding, an LNGselling price in excess of $0.30/gal is required. Also note that the effect of gas purchaseprice is apparently nonproportional beyond the $2/MCF Methane level. This is becausethe level of DOE funding has been limited to approximately $3 million, and the higherprice of gas (at $2.25/MCF Methane) does not secure a proportional increase in DOEsupport.

E F F E C T O F G A S S E L L I N G P R I C E A N D G A S

P U R C H A S E C O S T O N P R O J E C T R E T U R N

($1 ,000,000)

($500 ,000)

$ 0

$500 ,000

$1,000,000

$1,500,000

$2,000,000

$0.20 $0.25 $0.30 $0.35 $0.40

L N G S E L L I N G P R I C E ( $ / G A L )

P R O J E C T

R E T U R N F O R

2 Y E A R

O P E R A T I O N

G A S P U R C H A S E D A T $ 1 . 7 5 / M C F

$ 2 . 0 0 / M C F

$ 2 . 2 5 / M C F

Figure 30 Sensitivity of LNG Project to Gas Purchase Cost and LNG Sales Price

After the DOE funding stops, the project has the potential to be profitable, againdepending upon the sales and purchase prices of the product and raw material. Thesesensitivities are shown in Figure 31.

If the CMM is of high quality, comparable say to pipeline quality gas, then thesupplier will expect a price of around $1.75 to $2.00/MCF Methane. Under thiscondition, the project must be able to receive over $0.35/gal for the LNG to be profitable.

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EFFECT OF GAS PURCHASE PRICE AND LNG SELLING

PRICE ON PROJECT PROFITABILITY AFTER DOE FUNDING

STOPS

( $ 6 , 0 0 0 , 0 0 0 )

( $ 5 , 0 0 0 , 0 0 0 )

( $ 4 , 0 0 0 , 0 0 0 )

( $ 3 , 0 0 0 , 0 0 0 )

( $ 2 , 0 0 0 , 0 0 0 )

( $ 1 , 0 0 0 , 0 0 0 )

$ 0

$ 1 , 0 0 0 , 0 0 0

$ 2 , 0 0 0 , 0 0 0

$ 3 , 0 0 0 , 0 0 0

$ 4 , 0 0 0 , 0 0 0

$ 1 . 2 5 $ 1 . 5 0 $ 1 . 7 5 $ 2 . 0 0 $ 2 . 2 5

G A S P U R C H A S E C O S T ( $ / M C F M E T H A N E )

C U M U L A T I V E

O P E R A T I N G

P R O F I T F O R

S E V E N Y E A R S

A F T E R D O E

F U N D I N G S T O P S

L N G S E L L I N G P R I C E = $ 0 . 4 0 / G A L

$ 0 . 3 5 / G A L

$ 0 . 3 0 / G A L

$ O . 2 5 / G A L

Figure 31 Project Profitability After DOE Funding Ends.

The ultimate success of the venture depends upon whether the process thatevolves from this demonstration is replicable.

If the capital cost of a 10,000 gal/day plant can be kept to $3MM/10,000 gpd andif the operating cost can be limited to 5 cents/gal, a commercial plant would return 12%to the owners, for an LNG selling price of $0.40/gal.

Appalachian-Pacific, the project sponsor, would plan to pay the DOE back out ofthe licensing fees for the technology. Five per cent of the licensing fees collected byAppalachian-Pacific for plants like the one demonstrated would be paid to the DOE.Total payment would not exceed the DOE contribution.

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11.0 Project Development

11.1 Organization and Key Personnel

The proposed demonstration phase of the project will consist of three main parts.The first will consist of the completion of the engineering design, including anymodifications needed as a result of the 500 gpd Cryenco test program; the second willinvolve the procurement and construction of the physical plant. The third will involve aperiod of start up and test operation, during which time the process viability will bedemonstrated and the market for the LNG product solidified.

During the course of the project to date, Estes and Zahradnik have formalizedtheir participation by establishing Appalachian-Pacific Coal Mine Methane PowerCompany (Appalachian-Pacific, or simply AP), a limited liability corporation whosepurpose is the evaluation, acquisition, production and marketing of energy from CoalMine Methane.

Because the proposed demonstration Project involves many of these aspects, andbecause it will require considerable cost sharing, debt acquisition, and many commercialrelationships, the participant parties for the phase just completed have agreed thatAppalachian-Pacific will serve as the prime contractor and project manager for theproposed Demonstration Project.

The organization structure that will be employed for the demonstration phase isshown in Figure 32. AP will manage each phase of the proposed Demo. It will beassisted under agreements with other parties such as the State of West Virginia, whichwill cost share and support the project in various ways. West Virginia University willprovide technical consultants on an as needed basis. (See Appendix 3).

Cryenco will be a participant and will provide the TASHER to the project oncommercial terms. Cryenco will also serve as a technical advisor.

Invitation Energy will supply the CMM and the project site, also on commercialterms.

AP will complete the engineering work necessary for the construction of theDemo facility. This work will entail close cooperation with Cryenco, particularly withtheir 500 gpd prototype unit expected to be in operation later this year. AP may employan engineering firm for assistance in this aspect of the work.

The second phase of the Demo Project will consist of the procurement andconstruction of the equipment for the project. The principal piece of hardware is theTASHER itself, and AP will work closely with Cryenco on the scheduling andinstallation of this unit. AP may continue to use the services of an engineering companyto install the gas conditioning plant.

During the operating phase, AP will supply operators, and take generalresponsibility for the management and operation of the facility. In addition, AP will

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direct the distribution and marketing of the product LNG, under appropriate commercialterms.

The key project personnel for Appalachian-Pacific will be Charlie Estes,President, and Ray Zahradnik. The key person for Cryenco will be John Wollan. Copiesof their resumes are included in the Supplemental Material section.

CRYENCO(SUPPLY TASHER,TECHNICAL ADVICE)

INVITATIONENERGY(SUPPLY GAS,SITE)

STATE OF WESTVIRGINIA(COST SHARING)

WVU(TECHNICALCONSULTANTS)

APPALACHIAN-PACIFIC

PROJECT MANAGER

COMPLETEENGINEERING

OVERSEECONSTRUCTION

MANAGE TESTPHASE OFOPERATIONS

ENGINEERINGFIRM

DISTRIBUTE ANDMARKET LNG

PROPOSED ORGANIZATION CHART FOR PROJECT

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11.2 Project Schedule

An overall schedule for the project is provided in Figure 33. On this schedule, theproject has been assigned a February 2000 start date. This date corresponds to the timewhen Cryenco and their Los Alamos colleagues should be completing the operationaltesting of the 500 gpd prototype TASHER. It also allows the DOE about 6 months todetermine if it wishes to proceed with the proposed Demonstration.

In addition to the Cryenco testing of the 500 gpd prototype, AP intends to proceedwith a companion program of testing related to the gas conditioning system that will beused in the Demo.

A separate proposal has been made to the DOE/FETC for continued developmentwork on the gas conditioning system. The proposed statement of work for this activity isprovided below. The major Tasks are shown in Figure 33. The total costs for these tasksas well as the costs for the major activities in the Demo Project are also shown in Figure33.

The critical path items on the overall project schedule are the initiation of theCryenco test program, which has been assumed to be October 1999, and the initiation ofthe DOE Demo project, assumed to occur in late December of this year. Failure of eitherof these kickoff dates to be realized will postpone the project proportionately.

The other factor controlling the project schedule is the time for the fabrication andtesting of the 10,000 gpd TASHER. Cryenco has provided an estimate of 15 months forthis activity, and that duration drives the overall schedule.

A period of 24 months has been chosen as the time to start up, test and operate thefacility. This period is long enough to demonstrate the features of the system and todetermine the market viability of the LNG product.

11.2.1 Statement of Work for Cryenco Test Program

Task 1. System Design

Task 1.1 Establish Design Specifications for TASHER

Task 1.2 Identify and characterize additional elements in system

CMM deliveryGas combustion unit for TADUtility Requirements for TASHERDownstream storage and distribution of LNG

Task 1.3 Review existing technologies for conditioning CMM to meetdesign specs.

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Task 1.4 Comments and discussion about suitability of existingtechnologies.

Task 1.5 Prepare Preliminary system design.

Task 1.6 Estimate Preliminary Capital and Operating costs

Task 2. Operational Test Plan

Task 2.1 Ascertain schedule and special requirements of CryencoDemonstration (ca. 500 gpd) TASHER.

Task 2.2 Develop test plan, schedule and equipment for operational testing oof Gas Conditioning System (GCS) with Demonstration TASHER.

Task 2.3 Procure GCS equipment, deliver and assemble at TASHER siteand carry out test plan.

Task 2.4 Evaluate and document results from test

Task 3. Final Design Report

Task 3.1 Complete process design for 10,000 gpd TASHER system

Task 3.2 Complete final report and submit to DOE.

11.2.2 Statement of Work for Demonstration Project

Task 1. Engineering

This task involves activities that will incorporate the results of the Cryenco testprogram into the design and equipment specifications for the Demonstration facility.More detailed evaluations of the CMM composition will be made, and a final design forthe gas conditioning system will be established. An engineering firm may be selected toassist in this effort.

During this period, final financial arrangements will be made to secure privatefinancing for the project's share of the project expense. As noted above, the currentthinking is that a business loan will be obtained to cover the project's share of the cost,especially for the capital equipment costs. However, other options may be consideredand utilized.

Task 1.1 Evaluation of process design from Cryenco Test program

Task 1.2 Specification of CMM feed composition

Task 1.3 Final System Design completed

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Task 1.4 Equipment Bid Packages prepared

Task 1.5 Financing Terms arranged.

Task 2. Procurement and Construction

This task involves the procurement of the various equipment for the facility andthe construction of the Demonstration plant itself.

Task 2.1 Procurement

Task 2.1.1 Equipment Bid Packages released/responses evaluated (where necessary)

Task 2.1.2 Firm Orders placed (where necessary)

Task 2.1.3 Equipment received and placed at site

Task 2.2 Construction

Task 2.2.1 Site Preparation

Task 2.2.2 Equipment Assembly

Task 2.2.3 Component Testing

Task 3. Operations

This task involves the start up and continued operation of the facility. Uponcompletion of the Demo Test period, a final report will be prepared and submitted to theDOE.

Task 3.1 Process Start up

Task 3.2 Equipment acceptance and Start of Demo Operations

Task 3.3 Final Report

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12.0 Environmental Considerations and Benefits

12.1 Demonstration Project Site Impact Analysis

12.1.1 Gas Reserve

The initial coal mine methane potential at this site is presented in the Attachment1. Presently, the coal mine methane (a greenhouse gas) is vented to the atmosphere. Theestimated gas reserve (see attachment 1) shows the extent of the environmental problem.The onsite utilization of coal mine gas would reduce the amount of greenhouse gasesvented to the environment.

12.1.2 Potential water pollution

It is anticipated that the project site will have frequent truck traffic, which maylead to oil and hydrocarbon leaks at the site. The oil can get washed into surface watersfrom roads and parking lots, and there is potential for groundwater contamination. Thewater quality in nearby streams can be monitored up stream and down stream of theproject site to ascertain the influence of the project site on stream water.

12.1.3 Potential soil damage from leakage of lubricants

Low level discharges from urban runoff and treatment of roads contribute to asignificant part of the total hydrocarbon discharges. As such, the soil at the project sitemay get contaminated from leakage of lubricants and petroleum products used at the siteand in vehicles. The petroleum products used at the project site may enter surface soilsthrough spills. The retention capacity of soils depends on the particle size distributionand the viscosity of the lubricants.

The contamination of soils by petroleum products can have an influence on plantgrowth and the quality of runoff water. The potential methods for site remediation ofcontaminated soils depend on the type of soils, type of lubricants, and the extent of theproblem. Biodegradation of petroleum contaminated soils have been used successfully inthe past. A site remediation plan needs to be developed for potential soil contaminationat the project site.

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REFERENCES:

1. Echterhoff, L. W. (The M. W/ Kellog Company) "State of the Art of Natural GasProcessing Technologies - Topical Report Task 3, Vol 1, March 1991 GRIContract No. 5088-221-1753

2. Hajayla, Shirad(Catalytica, Inc.) private communication.

3. National Research Center for Coal & Energy, and Estes & Zahradnik, TopicalReport, "On-Site Power Generation at the Emerald Mine using Coal MineMethane:, July, 1995, METC Contract No. DE-AC21-95MC32185

4. Richmond, David (Raytheon Engineers & Constructors) private communication.

5. Ritzman, Bob (Zeochem) private communication.

6. Tannehill, C. C. and C. Galvin (Purvin & Gertz, Inc.) 1993, BusinessCharacteristics of the Natural Gas Conditioning Industry, Gas Research Institute.

7. Vapor-Liquid Equilibrium Data by Ju Chin Chu, Shu Lung Wang, Sherman L.Levy and Rajendra Paul, published by J. W. Edwards, Inc. Ann Arbor, Michigan.

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Schedule Name : TASHER Demonstration - 10,000gpd ScaleAs-of Date : 16-Jun-99 9:00a

00 01 02 03 04 To Go Jan

Task Name Dollars 3 2 2 2 2

CRYENCO TEST 176,000.00 ¦ ---------- . . . .SYSTEM DESIGN 69,000.00 ¦ ______ . . . .OPERATIONAL TEST 96,000.00 ¦ ____ . . . .FINAL DESIGN REPORT 11,000.00 ¦ ___ . . . .

DOE PROJECT 6,061,095.00 ¦ -------------------------------------------------------------- .ENGINEERING 252,000.00 ¦ ____ . . . .PROCUREMENT & CONSTR 3,145,095.00 ¦ ________________ . . .OPERATIONS 2,664,000.00 ¦ . . _______________________________ .

-----------------------------------------------------------------------------------------------------_____ Detail Task ------- Summary Task°°°°° Baseline_____ (Progress) ==___ (Progress) ___ Conflict___-- (Slack) ___-- (Slack) ..___ Resource delayProgress shows Percent Achieved on Actual @ Milestone------------------ Scale: 4 weeks per character ------------------------------------------------------

TIME LINE Gantt Chart Report, Strip 1

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Appendicies

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Appendix 1: Resumes of Key Personnel

RAYMOND L. ZAHRADNIK

P.O. Box 771814Steamboat Springs, Colorado 80477

(970) 879-2304

Energy Industry Executive with over 40 years successful management experience indirecting the development and commercialization of pioneering energyresources/technologies as industry executive, consultant, government R&D director, anduniversity professor.

Dr. Zahradnik assisted Energy Research Corporation (ERC) in preparing a successfulproposal for the Department of Energy’s Clean Coal Technology Program, Round V. Theproposal involved the co-location of a 2 MW fuel cell power plant with an Integrated CoalGasification Combined Cycle Facility. The overall project is expected to produce severalhundred megawatts, and cost over $500 Million. Dr. Zahradnik’s role in the proposalpreparation was to contribute to and evaluate the overall process flow scheme for the fuelcell portion of the project, the heat and material balance computations, the process testprogram and the commercialization plan. In addition, Dr. Zahradnik assisted ERC infinding a partner and site for this fuel cell project.

CAREER HIGHLIGHTS

1991 to Present MOUNTAIN BAY ASSOCIATES, INC.

PresidentEngineering consulting firm providing technical and managementadvisory services to the industrial/energy community.

1978 to 1991 OCCIDENTIAL PETROLEUM CORPORATION

President/CEO – Occidential Oil Shale, Inc.Directed planning, engineering and operations for thecommercialization of shale mining, retorting and processingtechnology on production scale. Let shale mining, retorting andprocessing technology on production scale. Led company efforts topropose a $2.19 billion commercial project to the SFC. Laterdeveloped a $200 million cooperative proof-of-concept project atFederal Leasehold Tract Cb in Colorado.

Vice President, Technology - Cities Service Oil and GasCorporation. Directed technical and service functions for NaturalGas Liquids Division. 9/85 to 2/87.

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General Manager – Occidential Oil Shale, Inc.Oversaw the successful upgrading and demonstration of themodified in situ technology to product oil on a commercial scale.3/82 to 11/82.

Director – Occidential Research CorporationDirected successful corporate research programs in mining, oil andgas production, coal, oil shale and geothermal. 10/78 – 2/82.

1/78 to 9/78 RAY ZAHRADNIK CONSULTING, INC.

Energy Consulting.Served as the principal energy resources development consultant to10 Fortune 500 Corporations and many other institutions, smallbusinesses and government agencies.

1/75 to 9/76 ENERGY RESEARCH AND DEVELOPMENT ADMINISTRATION

DirectorManaged ERDA’s growing research and development programs incoal gasification, liquefaction, combustion, as well as advancedpower systems.

5/74 to 1/75 OFFICE OF COAL RESEARCH, DEPARTMENT OF INTERIOR

DirectorResponsible for directing technical operations for the InteriorDepartment’s $500 million coal research program.

1972 to 1974 NATIONAL SCIENCE FOUNDATION

Acting Deputy DirectorOffice of Energy R&D Policy – Provided independent advice andrecommendations to the Executive Officer of the President onEnergy Research policy issues.

Energy Policy AnalystEvaluated effectiveness of federal coal and geothermal R&Dprograms for the Office of Management and Budget.

Program Director

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1967 to 1974 CONSULTANT

Industrial Consultant.Performed complex technical and economic studies in coalgasification, process control and chemical engineering for over 20major industrial clients.

1966 to 1974 CARNEGIE-MELLON UNIVERSITY

ProfessorPublished 24 pages and a book “The theory and Techniques ofOptimization” while teaching a full load of graduate andundergraduate students and courses.

1961 to 1966 WESTINGHOUSE RESEARCH AND DEVELOPMENT CENTER

Senior Engineer.Conducted research on fuel cells and computer systems searches inprofess modeling, optimal control, etc. Published 15 papers.

EDUCATION

Ph.D. in Chemical Engineering - Carnegie Institute of TechnologyM. S. in Chemical Engineering - Carnegie Institute of TechnologyB. S . in Chemical Engineering - Carnegie Institute of Technology

PERSONAL

Date of Birth: September 18, 1936Health: Excellent

Family of three grown children. Other interests include skiing and biking.

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CHARLES D. ESTES

1600 Wilson BoulevardSuite 900

Arlington, Virginia 22209

PROFESSIONAL EXPERIENCE

3/92 to Present FOUNDED CHARLES D. ESTES & ASSOCIATESConsulting in energy, natural resources, and budget andappropriations issues. Project development.

1/87 to 3/92 STAFF DIRECTOR, U.S. SENATE APPROPRIATIONSSUBCOMMITTEE ON INTERIOR AND RELATEDAGENCIES

Had principal responsibility for analyzing the President’s annualbudget requests for forty-four agencies totaling roughly $13 billion;recommending and defending budget amendments before theChairman, Senator Robert C. Byrd, and the other fourteenSubcommittee members; and staffing the Chairman during the threeto five-day periods when the Interior Appropriations Bill wasconsidered on the Senate Floor, and during the several weeks ofpre-conference and formal conference negotiations each year withthe House of Representatives conferees. These responsibilitiesrequired a detailed knowledge of law, policy, and substance relatedto federal energy, natural resources, and environmental programs.Each year involved scores of meetings with Members of Congressand thousands of discussions with Congressional staff, ExecutiveAgency staff; representatives from industrial, environmental, andother special interest groups; and with private citizens. As StaffDirector, Estes managed a subcommittee staff of three otherprofessionals and one secretary.

In additional to his duties on the Interior Subcommittee, for aperiod of approximately ten years he provided detailed and primarystaff assistance to Senator Byrd for flood protection and inlandwater navigation issues as well as for economic developmentmatters related to National Parks, Forest, and Wildlife Refuges inWest Virginia.

7/81 to 1/87 MINORITY STAFF DIRECTOR, SENATEAPPROPRIATIONS SUBCOMMITTEE ON INTERIOR ANDRELATED AGENCIES

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Responsibilities during this period were similar to those describedabove but were limited primarily to Democratic interests in theInterior Bill.

2/81 to 7/81 BUDGET ANALYST, DEPARTMENTAL BUDGET OFFICE,U.S. DEPARTMENT OF THE INTERIOR

Worked on budget justification for Secretary Watt’s five-year, $1billion plan to rehabilitate building, roads and utilities in theNational Park System. Other responsibilities included analysis ofagency budget requests for federal minerals management agencies.

6/79 to 1/81 PROFESSIONAL STAFF ASSISTANT, SENATEAPPROPRIATIONS SUBCOMMITTEE ON INTERIOR ANDRELATED AGENCIES

Principal responsibilities included advising the staff director and theChairman on budget requirements for most non-nuclear energyprograms of the U.S. Department of Energy as well as minerals-related R&D and management programs of the Department ofInterior.

12/77 to 6/79 CHIEF, NON-NUCLEAR ENERGY TECHNOLOGYBRANCH, DEPARTMENTAL BUDGET OFFICE, U.S.DEPARTMENT OF ENERGY

Assignment included managing a small staff with budgetformulation and execution responsibilities for the coal, oil, gas,solar and geothermal technology programs of the Department.

4/76 to 12/77 BUDGET ANALYST, FEDERAL ENERGY ADMINISTRATION

Position included budget formulation responsibilities for energyconservation’s, regulatory and energy resource developmentprograms with some initial planning and review responsibilities forthe Strategic Petroleum Reserve.

5/71 to 4/76 Employed in Controller's Office: Federal Power Commission (now

FERC), holding several positions including program analyst,management analyst, and, lastly, assistant to the controller.

9/70 to 3/71 Active duty with the U.S. Army as part of my commitment to theDistrict of Columbia National Guard.

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EDUCATION

The American University: BA government, 1970: completed 15 hours in graduate-leveleconomics.

OUTSIDE ACTIVITIES

Entering second year as chairman of the Accokeek Foundation, a non-profit educationalinstitution and land trust which manages the National Colonial Farm at PiscatawayNational Park directly across the Potomac River from George Washington's home, MountVernon. The Foundation has a staff of twelve and an annual budget of approximately$1,000,000.

Founded Friends of the Potomac in 1997. The Friends is a Potomac Basin-wide umbrellaorganization composed of non-profit organizations, local governments, and businessinterests including Mettiki Coal, Anker Energy and Westvaco, among others. ThePotomac River Basin was designated an American Heritage River by the President in1998 based on the Friends' application which was scored number one among 124 U.S. riverapplications considered by the White House advisory committee.

Previously served five years as Vice President, Palisades Citizen Association;Washington, D.C.

Served approximately three years on the Mayor’s Task Force to develop a 4(f) statementon rehabilitation and replacement options for The Whitehurst Freeway, Washington, D.C.

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NAME: DOUGLAS GENE PATCHEN

PROPOSED POSITION: Program Coordinator, Utilization of Coal Mine Methane

EDUCATION: Harpur College, 1964Binghamton, New YorkB.A. Geology and Math

State University of New York at Binghamton, 1967Binghamton, New YorkM.A. Geology

Syracuse University, 1972Syracuse, New YorkPh.D., Geology

YEARS OF RELEVANT EXPERIENCE: 28

AREAS OF QUALIFICATION: Dr. Patchen has extensive experience in research onoil, natural gas, coalbed methane, stratigraphy, and petrology. He has managed oil andgas research projects in the Appalachian Basin involving the Devonian shales, tight gas-bearing reservoirs, coal-bed methane and heterogeneity in oil reservoirs. In addition, hehas been selected to manage the Appalachian basin portion of several nationwide studies,including the Correlation of Stratigraphic Units of North America (COSUNA) project forthe American Association of Petroleum Geologists (AAPG). He has published more than100 papers and abstracts dealing with oil and gas geology, stratigraphy, petrology andsummaries of drilling activity.

CAREER HISTORY:

National Research Center for Coal and Energy, Morgantown, WV, 1990 to PresentPosition: Program ManagerSupervisor: John Holmgren (304) 293-2867

Oversees the planning, research efforts, and reporting of complex projects; acting directorof the Appalachian Oil and natural Gas Research Consortium; served as program managerof a three year project entitled “Measuring and Predicting Reservoir Heterogeneity inComplex Deposystems”; currently manages two projects, The Atlas of Major AppalachianGas Plays, and Enhancement of the Tertiary Oil Recovery Information System.

West Virginia Geological and Economic Survey, Morgantown, WV, 1990 to PresentPosition: Chief GeologistSupervisor: Larry Woodfork (304) 594-2331

Oversees all areas of geologic research conducted by the geological survey, including oiland gas, coal, economic and field mapping; chairs the Research Committee which

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approves project proposals, conducts annual reviews of research in progress, and obtainsinternal and external reviews of all research products prior to publication; serves as thepoint person on research teams from the proposal writing stage through to the completionof research contracts.

West Virginia Geological and Economic Survey, Morgantown, WV, 1971 to PresentPosition: Petroleum Geologist and Head, Oil and Gas SectionSupervisor: Larry Woodfork (304) 594-2331 (formerly Robert B. Erwin, 1971-1988)

Oversees the functional operation of the section in both service and research categories;supervises geologists and other staff; is responsible for the compilation of drillingstatistics and annual reports for several oil and gas organizations; coordinates the annualAppalachian Petroleum Geology Symposium and serves on various committees; overseesthe preservation and utilization of basic data such as maps, drillers' logs, mechanical logs,and the core and sample library.

West Virginia University, Morgantown, WV, 1982 to PresentPosition: Adjunct Professor of GeologySupervisor: Dr. Alan Donaldson (304) 293-5603

Has worked with the Geology Department to obtain research contracts and to host theAnnual Appalachian Petroleum Geology Symposium.

West Virginia University, Morgantown, WV, 1973 to PresentPosition: Associate member of the Graduate FacultySupervisor: Self

Supervises graduate research at the Ph.D. level as well as the masters level.

West Virginia Geological and Economic Survey, Morgantown, WV, 1979-1985Position: Chief, Fossil Fuels DivisionSupervisor: Dr. Robert Erwin (retired)

Administrative duties included budget preparation for both the Oil and Gas and Coalsections of the survey; was responsible for all research in these two sections.

West Virginia University, Morgantown, WV, 1977-1982Position: Adjunct Associate Professor of GeologySupervisor: Dr. Alan Donaldson (304) 293-5603

Served on graduate student committees and chaired two Ph.D. committees and several MScommittees.

West Virginia University, Morgantown, WV, 1973-1977Position: Adjunct Assistant Professor of Geology

99

Supervisor: Dr. Alan Donaldson (304) 293-5603

Served on numerous graduate student committees; occasionally taught classes in welllogging.

West Virginia Geological and Economic Survey, Morgantown, WV, 1969-1970Position: Cooperating GeologistSupervisor: Dr. Robert Erwin (retired)

Worked on special projects leading to survey publications; compiled drilling statistics;performed subsurface geology and petrographic work on several Silurian sandstones.

West Virginia Geological and Economic Survey, Morgantown, WV, 1966-1968Position: Mineralogist-PetrographerSupervisor: Dr. Paul H. Price (deceased)

Combined core and sample descriptions with subsurface mapping and correlation;produced four circulars dealing with current exploration and development of Devonianand Silurian gas reservoirs.

PROFESSIONAL AFFILIATIONS: Society of Sigma XiNew York State Geological AssociationAmerican Association of Petroleum

GeologistsAppalachian Geological SocietyPittsburgh Geological SocietyPittsburgh Association of Petroleum

Geologists

COMMITTEES AND AWARDS:

Past President, Vice President, Secretary and Treasurer of the West VirginiaUniversity Chapter of the Society of Sigma XI.Current Vice President, former Treasurer and Secretary, Eastern Section of theAmerican Association of Petroleum Geologists.Member, Committee on the Preservation of Cores and Samples for AAPG.Former member, Committee on Correlation of Stratigraphic names for AAPG.CSD Chair (alternate) and API Respondent (alternate) for the Committee onStatistics of Drilling for AAPG, 1971-1990.Coordinator of Oil and Gas Development Papers for Pennsylvania, Ohio,Maryland, Virginia, and West Virginia and author of West Virginia papers.Member, Coalbed Methane Subcommittee for the Federal Power Commission(now FERC).Best Paper Award, Eastern Section AAPG, 1974.Public Service Award, Eastern Section AAPG, 1989.

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SHORT RESUMEHEMA J. SIRIWARDANE

Affiliation: Professor of Civil Engineering Telephone: 304-293-3031 ext.620

Department of Civil Engineering Fax: 304-293-7109

West Virginia UniversityMorgantown, West Virginia 26506

Expertise: Geotechnical Engineering, Geomechanics, Rock Mechanics, ComputerMethods in Geotechnical Engineering.

Education: B.Sc(Honors), University of Ceylon, Peradeniya, Sri Lanka, 1975Ph.D. Virginia Polytechnic Institute and State University, 1980(Grade Point Average: 4.0)

Citizenship: United States Citizen

Professional Experience:

1988 - Present: Professor of Civil Engineering, West Virginia University,Morgantown, West Virginia

1984 – 1988: Associate Professor of Civil Engineering, West VirginiaUniversity

1981 – 1984: Assistant Professor of Civil Engineering, West VirginiaUniversity

1977 – 1980 Research Associate/Doctoral Student, Department of CivilEngineering, Geomechanics Group, VPI & SU, Blacksburg,Virginia

Related Experience:

During the last 14 years, the major thrust of Pro. Siriwardane’s research work hasbeen on numerical modeling in geomechanics. He has extensive experience on Computermodeling and code development. Professor Siriwardane has served in a number ofnational and international committees dealing with rock mechanics and geomechanics.He ahs held membership in a number of professional organizations and honor societiesincluding the International Society for Soil Mechanics and Foundation Engineering,International Society for Rock Mechanics, American Academy of Mechanics, Society ofEngineering science, Society of Petroleum Engineers, and the International Associationfor Computer Methods and Advances in Geomechanics. He is currently a member of theRock Mechanics committee of ASCE. He also serves as a member of the editorial board

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for the International Journal for Numerical Methods in Geomechanics. ProfessorSiriwardane serves as a member of the Board of Directors for the InternationalAssociation for Computer Methods and Advances in Geomechanics. He has also been areviewer for numerous journals in the area of geomechanics, and for a number of fundingagencies. Recently, one of his papers dealing with longwall mining was selected for thebest paper award by the American Association for Petroleum Geologists. ProfessorSiriwardane served as the Chairman for the Eighth International Conference on ComputerMethods and Advances in Geomechanics, which was held in the USA in 1994; thisconference was last held in the USA in 1976.

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SUMMARY RESUME

K. AMINIAN, Ph.D.PETROLEUM & NATURAL GAS ENGINNEING DEPARTMENT

WEST VIRGINIA UNIVERSITYMORGANTOWN, WV 26506TELEPHONE (304) 293-5695

PROFESSIONAL EXPERIENCE:

7/92 to Present Professor of Petroleum and natural Gas Engineering

7/87 to 7/92 Associate Professor of Petroleum and Natural Gas Engineering

8/83 to 7/87 Assistant Professor of Petroleum and natural Gas Engineering

7/79 to 8/83 Reservoir Engineer Specialist, MichCon, Detroit, Michigan

EDUCATION:

Ph.D. Chemical Engineering, The University of Michigan Ann Arbor, Michigan, 1982.

M.S.E. Chemical Engineering, The University of Michigan, Ann Arbor, Michigan, 1978.

RESEARCH GRANTS:

1. Development of Standard Test Protocols and Barrier Design Models for In SituFormed Barriers project EDTO7, DOE/METC, 8/94-10/95, $1,000,000.

2. The Atlas of Major Appalachian Gas Plays, Grant No. DE-RP2-91MC28135,DOE/METC, 10/91 to 5/95, $3,000,000.

3. Measuring and Predicting Reservoir Heterogeneity in Complex Deposystems, GrantNo. DE-AC22-90BC14675, DOE/PETC, 10/90 to 10/93, $5,000,000.

4. Co2 Enhanced Oil Recovery Mobility Control by In-Situ Chemical Precipitation,Grant No. 85MC2044, DOE/METC, 1/86 to 8/89, $357,085.

5. Technology/Database Development for Eastern Gas Bearing Formations, Grant No.85MC22189, DOE/METC, 11/85 to 8/87, $149,575.

PUBLICATIONS (a partial list):

1. Predicting the Production Performance of Gas Reservoirs Using Production TypeCurves, Scientia Iranica, Vol. 1, No. 3, pp. 13-20, 1994.

2. A Simple Method for Modeling Megascopic Heterogeneities in Fluid Flow Models inPorous Media, Math, Comput. Modelling, 1994.

3. Permeable Rock Model Using An Array of Pores, Powder Technology, Vol. 75, pp.107-112, 1993.

103

4. Pressure Analysis of an Unstimualted Horizontal Well Using type Curves, Journal ofPetroleum Technology, Vol. 43, No. 8, pp. 988-993, 1991.

5. Recovery of Oil from Underground Drill Sites, Energy Sources, Vol. 13, pp. 417-431,1991.

6. Production Decline Behavior of Gas Wells in Multi-Well Reservoirs, Journal ofPetroleum Technology, Vol. 42, No. 12, pp. 1573-1579, 1990.

7. Simultaneous Calculation of Pressure and Temperature in Flowing Gas Wells, SPEComputer Applications, May-June Issue, pp. 25-28, 1990.

8. Production History Analysis in Predicting Dry Gas-Well Performance, InternationalJournal of Petroleum Science and Engineering, Elsevier Science Publisher,Netherlands, Vol. 2, pp. 13-26, 1989.

9. Determining Gas Pseudo-functions, SPE Computer Applications, September-OctoberIssue, pp. 12, 1989.

10. Phase-Equilibrium and Reservoir Depletion Calculations on PC Using the Peng-Robinson, Equation of State, SPE Computer Applications, May-June Issue, pp. 20-21,1989.A Production Forecasting Model for Gas Wells, Math, Comput, Modelling, Vol. 11,pp. 391-395, Pergamon Press, 1988.

11. The Evaluation of Silurian-Niagaran Reef Belt in Northeastern Michigan, SPEFormation Evaluation, Vol. 2, No. 4, pp. 428-434, 1987.

PROFESSIONAL ACTIVITIES

1. General Chair For 1995 SPE Eastern Regional Conference and Exhibition2. Officer of Northern West Virginia SPE Section (1990-95)

3. Coordinator and member of Steering Committee for North American CoalbedMethane

Forum4. Member of Conduct Committee for SPE 1992 annual Technical Conference5. Member of SPE International Computer Applications Committee (86-89)6. Technical Editor for SPE Computer Applications (88-90).7. Technical Program Committee for 1988, 1989, 1991 SPE Eastern Regional

Conference8. Technical Program Committee for 1988 SPE/PIAM Conference

104

WILLIAM H. MCGLINCHEY8 Ashwood Lane

Morgantown, WV 26505304.296.6568 – Home304.293.7882 – Office

OBJECTIVE To be associated with a progressive organization where successfulengineering and management experience will be value.

TRAINING NATIONAL ALTERNATIVE FUELS TRAINING PROGRAMWest Virginia University (11/93 – present)1460 Earl Core RoadMorgantown, WV 26505

Facility Manager• Curricula Development (NGV, LPG, Forklifts, Transient

Emissions)• Government and Industry Liaison

DOE Clean Cities ProgramEPA Office of Mobil Sources

• Moderated nationally broadcast Alternative FuelTeleconferences

• Development of National Alternative Fuels TrainingCenter

Facility, Equipment Specification and Training

PUBLIC LIASON NATIONAL ENERGY SERVICE COMPANY, LP (6/92 – 11/93)18 Harrison StreetZanesville, OH 43702

Manager, Customer Service• Technical support in-house conversions and telephone

“hot-line”• Dealership network start-up and training• Corporate “troubleshooter”• Industry participation:

AGA CNG NGV-3 Systems Certification TaskforceEPA 40 CFR-84-86 NGV Emission StandardsFTP-75 Federal Emission Testing

ADMINISTRATION METROPANE, INC. (1/91 – 6/92)2772 Sawbury BoulevardColumbia, OH 43235

105

Director of Technical Services• Staffing and training of NGV conversion facilities• Developed corporate training program• AGA/ASE committee for NGV Technician Certification• Various Industry certifications

Alternative Fuels Institute-Hocking Tech CollegeRailroad Commission of Texas, CNG/LPGAutomotive Natural Gas Inc. (ANG)IMPCO Technologies, Inc.Gaseous Fuel Injection Systems, Inc. (GFI)

SALES ALLEN GROUP, TESTPRODUCTS DIVISION, (1985 – 1991)6360 Promier Ave. NWNorth Canton, OH 44720

Manufacturers’ Representative• Developed Central Ohio (6 country) sales organization• Average Annual sales volume - $250,000• National Accounts activity:

Columbia Gas, Goodyear, Firestone, Precision Tune• Advisory Boards: Ohio EPA Program, ASA of Ohio –

Ed. Comm.• Taught latest automotive computer technology classes

TEACHING COLUMBUS PARAPROFESSIONAL INSTITUTE (1982 – 1986)1516 West Broad St.Columbus, OH 43216

Senior Instructor• Developed automotive curriculum for one year program,

ASE certification• Specialized in:

Fuel injection, computer controls,Electronics, chassis and suspension

• Consultant with local service shops• WOSU Radio Open Line – “Car Doctor” (3 Years)

MANAGEMENT COMBUSTION ENGINEERING (1979 – 1982)810 Slocum StreetLancaster, OH 43130

Quality Control Manager• Established company quality policies and major quality

objectives• Designed organizational structure needed to carry out

objectives

106

• Obtained U.S. patent – Impact Resistant PaintFormulation

EDUCATION

• Ohio State University, Columbus, OH, Industrial Engineering1964-1967

• Western Electric In-Service Course: Quality Control I, II 1970 –1972

• Ohio Teaching Certificate – Automotive Mechanics 1977 –1983

• National Institute for Automotive Service Excellence (ASE)-CMAT 1983

References are available upon request.

107

Appendix 2: Introduction of Appalachian-Pacific Coal Mine MethanePower Company, LLC

Appalachian-Pacific Coal Mine Methane Power Company is a limited liability company charteredin West Virginia in 1996. The Company is wholly owned by Charles Estes of Washington, DC and Dr.Raymond Zahradnik of Steamboat Springs, Colorado.

Formation of Appalachian-Pacific, a company created to develop commercial opportunities forthe capture and utilization of waste methane from coal mines, was stimulated by the Department ofEnergy's Coal Mine Methane Program. In turn, Appalachian-Pacific is currently designing a project whichis a catalyst for cooperation and achievement of mutual goals among four separate programs in the DOE:The Coal Mine Methane and TASHER Cryogenic Liquefier programs in Fossil Energy and the HeavyVehicles and Clean Cities programs in the Office of Energy Efficiency. The project also supports specificclean air objectives of West Virginia, Pennsylvania and EPA and certain key technical objectives of thenatural gas vehicle industry.

Appalachian-Pacific holds rights for the use and marketing of the TASHER liquefier technology for all applications associated with Coal Mine Methane in much of the world. The company also holds rights to use and market the TASHER technology for transportation appilcations using any feedstock is several eastern US states. These rights are held under agreement with the technology owner, a subsidiaryof Chart Industries. It is anticipated that firm orders for commercial units may be placed in late 2001.

In related business, Appalachian-Pacific hopes to initiate the commercial sale and distribution ofLNG (from conventional suppliers) throughout northern West Virginia and southwestern Pennsylvaniaprior to 2001.

Appalachian-Pacific is a Steering Committee member of the West Virginia Clean State Coalition.

108

Appendix 3: Letters of Cooperators Letters of Endorsement Other Supporting Material

109

110

111

STATE OF WEST VIRGINIA

OFFICE OF THE GOVERNORCHARLESTON 25305

CECIL H. UNDERWOODGOVERNOR

June 18, 1999The Honorable Robert GeeAssistant Secretary for Fossil EnergyUS Department of Energy1000 Independence Ave., SWWashington, DC 20585

Dear Secretary Gee:

I am pleased to indicate my support for Appalachian-Pacific and West VirginiaUniversity's proposed demonstration of a novel thermoaccoustic process to liquefy coalmine methane gasses presently venting from a mine in Marion County, West Virginia. Theproject sponsors indicate that the liquefied natural gas (LNG) product would be sold astransportation fuel to heavy vehicle fleet operators in the region.

As the first Clean State partner with the US Department of Energy (DOE), WestVirginia is a national leader in the promotion and use of clean, alternative fuels. Our stateranks second in per capita private investment in alternative fuels infrastructure with 26natural gas refueling stations. West Virginia’s alternative fuel vehicle conversion tax creditestablishes us as second to none in the state government's commitment to alternative fuels. Iam proud to note that West Virginia University developed the acclaimed mobiledynamometer project which supports DOE's alternative fuels program testing andverification efforts throughout the Nation. The University also created and administers theNational Alternative Fuels Training Consortium of some 20 sites across America wherepersonnel are trained and certified to teach alternative fuel vehicle maintenance and safety.

Clearly, demonstration of the thermoaccoustic liquefaction technology wouldcomplement a distinguished commitment that we in the Mountain State have already madeto the use of alternative transportation fuels. I am pleased to learn that the proposeddemonstration also supports West Virginia’s strategies for economic development and thewise use of our resources in multiple ways. First, Appalachian-Pacific was chartered inWest Virginia. Second, its expressed purpose is to develop economic uses for coal minemethane, a plentiful state resource which is underutilized and often wasted. Third, thepossible commercial production of LNG would create a new industry and new jobs in WestVirginia while reducing American dependence on foreign oil. And, fourth, capturing

112

OFFICE OF THE GOVERNOR

The Honorable Robert GeeJune 18, 1999Page Two

methane vented to the atmosphere from coal mines and converting it to clean transportationfuel would be a double benefit for the environment.

In closing, a successful demonstration, as proposed, will cause the loss ofconsiderable sums from the State Road Fund as a consequence of the alternative fuelvehicle conversion tax credit program noted earlier. This lost revenue could total as muchas $7,500,000, and would not occur absent the demonstration. Whatever the eventualamount, which the State Tax Department will document later, I understand that these costsincurred by the State of West Virginia are in excess of the cost sharing percentage requiredof the demonstration project sponsors. Consequently, I ask that any excess cost sharegenerated by the State be reserved to match possible cost sharing requirement on somesubsequent State-sponsored project with the federal government.

My Administration is committed to facilitating the proposed demonstration in anymanner that is appropriate and to the extent that the project is in compliance with allapplicable laws and regulations. I wish Appalachian-Pacific and West Virginia Universityevery success in this endeavor, and encourage the US Department of Energy to give thisproposal every favorable consideration.

CHU/lc

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114

115

C O N F I D E N T I A L

Appendix 4: West Virginia Alternative Fuels Tax Credit

(From: “Incentive and Laws: Guide to Alternative Fuel Vehicle Incentives and Laws,” USDOE,September 1998, p. 140)

116

Appendix 5: C. Estes 6/28/99

Comparison of Greenhouse Gas Benefits of Silver Maple Trees and 10,000gpd TASHER (LNG)

Metric Tons 26.865 1.4 mmcf per day/52112 (Assumes essentially 2/3rds goes to LNG, 1/3rd to processing) CH4 per day continuously supplying 10MW.)

Greenhouse gas 24.5 EIA: Voluntary Reporting of Greenhouse Gases 1995, p.2, July 1996. eqivalency factor

=Gross Equivalent CO2 658.198 effect

less:Less units of CO2 created by 24.602 =26.865x.333 x 2.75 (CH4 conversion to CO2 factor) burning 1/3 of CH4 above as process gas

Equivalent CO2 effect 633.596x

Conversion of Metric tons 2,200 to lbs.

=CO2 equivalent greenhouse 1,393,911.00 gas impact in lbs.

xConversion from 365 days to year

=508,777,515

Less est. annual NOx impact in lbs. < -14,080,000 < 20 tons NOx per yr X 320 GWP index X 2200 lbs per ton. (Number may be refined and lowered.)

Net annualized impact in lbs. 494,697,515

divided by:Average annual lbs. of CO2 42.964 Conservative estimate based on:EIA: "Calculating Carbon Seqestration...Urban... Settings" (Silver Maple, "H, M") sequestration by Maple Tree

=# of Maple Trees needed to 11,514,207 Sixty year comparison, based on planting all trees in year "0." The number of trees could vary between 6.6 and 25 match effect of 10,000 gpd TASHER million depending on tree species. Comparisons after the 60th year are even better for TASHER due to tree mortality.

Other benefits: at $10 per ton of carbon sequestered by trees (or $3.20 per seedling distributed), a 10,000 gpd project would produce mitigation valued at $613,000 annually, i.e.: =((494,697,515/2200) x12/44 x $10). Also, 11,514,207 trees, at 20 per acre, requires 575,710 acres, or 899.5sq. mi. for planting; TASHER requires virtually no new acreage.)

117

Appendix 6: Technical Papers Related to Thermoacoustic Liquefier Technology

118

119

120

Floating Production Systems ConferenceLondon, England, December, 1997

Thermoacoustic Natural Gas Liquifier

John J. Wollan and Mark AllenCryenco, Inc.

3811 Joliet StreetDenver, CO 80239 USA

Gregory W. SwiftLos Alamos National Laboratory

Mail Stop K764Los Alamos, NM 87545 USA

Introduction

Cryenco, Inc. and Los Alamos National Laboratory (LANL) are collaborating to

develop a natural gas powered, natural gas liquefier that will have no moving parts and

require no electrical power. It will have good efficiency, remarkable reliability, low cost and

will be transportable.

The liquefaction of natural gas, which occurs at -161ºC (-259ºF) at atmospheric

pressure, has previously required rather sophisticated refrigeration machinery. The 1990

invention of the thermoacoustically driven orifice pulse tube refrigerator (TADOPTR)

provides cryogenic refrigeration with no moving parts for the first time. In short, this

invention uses acoustic phenomena to produce refrigeration from heat. The basic

refrigerator consists of nothing more than helium-filled heat exchangers and pipes, made of

common materials, without exacting tolerances. In the Cryenco-LANL collaboration (with

the LANL tasks supported by the US Department of Energy), we are developing a version

of this invention suitable for use in the natural-gas industry. The project is known as

"acoustic liquefaction" for short.

Our program plans call for a multi-phase development. Phase I will achieve a capacity

of 500 gallon per day (i.e., approximately 42,000 standard cubic feet per day (scfd),

requiring a refrigeration power of about 7 kW), which is large enough to illuminate all the

issues of large-scale acoustic liquefaction without undue cost, and to demonstrate the

liquefaction of about 70% of input gas, while burning about 30%.

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Phase II will develop versions of approximately 106 scfd = 10,000 gallon per day (gpd)

capacity with a projected liquefaction rate of about 80% of the input gas. Phase III will be

directed toward significantly larger systems. In parallel LANL will continue fundamental

research on the technology directed toward increased efficiency.

Objectives

Although most natural gas is still carried from well to user as gas in pipelines, the use of

liquefied natural gas (LNG) [1] has been increasing 5-10% per year. A typical modern,

large liquefaction plant costs a billion dollars, liquefies 109 scfd, uses 15% of its throughput

to power itself, and has substantial operating and maintenance costs. There are, however,

a number of market applications where the need for smaller, reliable, inexpensive

liquefaction equipment is clear. The objective of this program is to develop a new

acoustic, natural gas liquefier with its inherent advantages - high reliability, low

maintenance, natural gas burner powered, transportable - to address new and emerging

LNG market opportunities.

Technology

Background:

Scientists at Los Alamos National Laboratory and the National Institute of Standards

and Technology (NIST) invented the TADOPTR [2,3] and built a small experimental version

[4] directed toward cooling of infrared sensors on satellites. This invention and

development follows a long evolution of related devices, each directed toward elimination

of moving parts from heat engines and refrigerators.

Pulse tube refrigeration is a variation of the Stirling cycle. Stirling-cycle refrigeration [5],

over a century old, has historically required two moving pistons, one of which is in contact

with the cold temperature. In 1963 Gifford and Longsworth [6] discovered a refrigeration

technique which eliminated the cold piston. They called this new technique pulse tube

refrigeration. In 1984 Mikulin made a significant fundamental

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122

advance, adding a flow resistance; such "orifice" pulse tube refrigerators [7], developed

largely at NIST in Colorado, now routinely reach -220ºC. Subsequent improvements have

brought the efficiency of pulse-tube refrigerators near that of Stirling refrigerators. The

pulse tube refrigerators importance is primarily due to the elimination of the cold piston, a

significant simplification leading to high reliability.

Until recently, pulse tube refrigerators still required one moving piston or valve(s), at

ambient temperature. LANL and NIST eliminated this last moving part, substituting for it a

thermoacoustic engine. Thermoacoustic engines [8, 9] generate an acoustic standing

wave from heat, thus producing oscillating pressure at the frequency of the standing-wave

resonance. Although thermoacoustic devices were discovered and explained qualitatively

a century ago, research at LANL has led to quantitative understanding and the initiation of

practical implementations.

Description:

The acoustic liquefier has three major components:

1. The power source - a natural gas burner.

2. A thermoacoustic driver (TAD), or engine, which converts the thermal input power

(heat of combustion of the burner) to acoustic power, i.e. a pressure oscillation.

(Fig. 1)

3. An orifice pulse tube refrigerator (OPTR) which converts the acoustic power into

heat removal or refrigeration power. (Fig. 2)

The thermoacoustic driver consists of three heat exchangers and a resonator tube.

Heating one of the driver heat exchangers to about 750ºC, or higher, while maintaining

another heat exchanger at ambient creates a large temperature gradient across an

intermediate heat exchanger (the "stack") of the resonator which induces a spontaneous

pressure oscillation within the working gas (typically helium). These oscillations are

sustained by maintaining the required temperature gradient from the burner heat input.

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The OPTR replaces the cold, moving displacer in a Stirling system with a gas column (in

the pulse tube) and a compliance network (the orifice and reservoir volume) - all static

components. The refrigerator has four heat exchangers and some associated tubes and

piping. As the thermoacoustic driver alternately compresses and heats, then expands and

cools the working helium gas in the pulse tube, the compliance network causes the gas to

cycle with the appropriate phasing between the cold, heat extracting heat exchanger and

the warm, heat rejection heat exchanger. Thus the OPTR pumps thermal energy from a

cold reservoir to a warm reservoir, like any refrigeration device. Multiple OPTRs can be

used, operating at staged cold temperatures, to improve system efficiency.

The length of the acoustic liquefier is determined by the operating frequency and the

speed of sound in the working gas; the cross sectional area is proportional to the system

power. The optimal operating frequency is a tradeoff between the desired machine size

and practical limitations set by characteristic dimensions within the heat exchangers. The

nominal length chosen is about 12 meters; this allows the system to be mounted on a

standard flatbed trailer for transporting. This results in an operating frequency of

approximates 40 Hz. For a 500 gpd system the resonator diameter is about 20 cm. For a

10,000 gpd system this increases to about 90 cm.

Project Description

From the beginning of the Cryenco-LANL-NIST collaboration in 1994, the development

of a practical acoustic liquefier appeared very challenging. Even the 500 gpd prototype

represents a scale-up of a factor of 1600 in cooling power over the best previous

TADOPTR, which used much simpler electric heater power for the engine and had an

efficiency implying that it would have liquefied only 9% of a natural-gas stream while

burning the other 91%. To address this great challenge, our project encompasses three

parallel thrusts:

1. Phased Prototype Development. As described in the introduction, we chose to

break the development into several phases, with target capacities of 500 gallons per

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124

day in Phase 1, 10,000 gallons per day in Phase II and over 10,000 gallons per day in

Phase Ill.

2. Interaction and Cooperation. To develop the Phase I prototype as quickly as

possible, by using the strengths of each partner, we have adopted a highly interactive

working relationship. LANL personnel have been at Cryenco one-third of the time, and daily

telephone contact is the norm at other times. Most physics design and test-and-

measurement duties have been LANL responsibilities, while most engineering and almost

all hardware and test-facility construction have been Cryenco responsibilities.

3. Science and Fundamental Invention. Because TADOPTR technology is so new,

opportunities still exist for dramatic improvements based on fundamental understanding.

Hence, LANL continues fundamental applied research on TADs and OPTRS, with a focus

on patentable inventions leading to improved efficiency without sacrificing high reliability or

low cost.

Accomplishments

The 500 gallon per day prototype will comprise two identical thermoacoustic engines

and three identical orifice pulse tube refrigerators, sharing a common resonator. In the

past year, we designed, built, and assembled the first pieces of this prototype: one engine

and one refrigerator on the resonator. Testing of this assembly with a burner heating the

engine began in January 1997, and by March the assembly produced LNG at a rate of 1 00

gallons per day. Testing is ongoing, but it appears certain that 500 gpd capacity design

goals will be met, and probable that efficiency goals will be met in the 500 gpd prototype.

This important milestone has demonstrated for the first time that TADOPTR technology

works at a capacity suitable for practical liquefaction of natural gas.

Construction and assembly of the engine, refrigerator, and resonator were difficult, and

many engineering challenges were discovered and overcome in all three components.

Each problem was regarded as an opportunity to reduce the projected cost to manufacture

the acoustic liquefier. The resulting dramatic reduction in projected

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125

costs achieved this year was unexpected, and is a milestone as important as the 100-

gallon-per-day capacity demonstration.

Fundamental work at LANL this year broke new ground in several areas. A new type of

thermoacoustic heat exchanger with shell-and-tube geometry was tested successfully.

Turbulent limitations to the use of variable acoustic impedance in OPTRS were explored,

and a control method was invented (patent in process). Both these developments were

completed in time to be used in the Cryenco prototype, where they are working as well as

predicted. A third invention, use of a tapered pulse tube to suppress streaming-driven

convection (patent in process), was also demonstrated at small scale at LANL and

incorporated into the Cryenco prototype; testing of this feature at Cryenco has verified the

expected performance improvement.

Applications

The efficiency of small acoustic liquefiers will be reasonable, although not initially as high

as that of conventional large-scale liquefiers, which have enjoyed decades of engineering

development. We expect the first 500 gallon per day production units to liquefy 70% of

throughput, and the first 10,000 gallon per day production units to liquefy 75-80% of

throughput. Ongoing research will lead to improved efficiency.

The acoustic liquefier will offer unsurpassed reliability. Because it has no exotic

materials or close tolerances anywhere (it is nothing more than welded piping and heat

exchangers), its cost will be low, and it will be economical at a size far smaller than that of

existing LNG equipment. These features are suited to a wide range of applications at

small, medium, and large capacity:

Small Capacity (approximately 500 gallons per day): Local liquefaction of pipeline gas

at fleet-vehicle fueling stations, recovery of landfill gas and other bio-waste gas, recovery of

associated gas from small oil wells, recovery of coal bed gas, boiloff recovery at seasonal

peak-shaving facilities, and liquefaction of gas for storage near emergency facilities such

as hospitals.

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126

Mediurn Capacity (approximately 10,000 gallons per day): Production from shut-in

wells, recovery of associated gas from offshore oil wells, liquefaction at seasonal peak-

shaving facilities, and most of the applications listed above for small capacity.

Large Capacity (much larger than 10,000 gallons per day): It is premature to predict the

acoustic liquefier's efficiency, reliability, and cost at such large scales, but it is possible that

large-scale gas production in extremely hostile environments will be enabled by this

technology's intrinsic high reliability.

Future Activities

We will complete testing the present one-engine, one-refrigerator subsystem of the 500

gpd prototype, and then complete the 500 gpd prototype. The 500 gpd will incorporate

numerous improvements to vital auxiliary subsystems necessary for production. Near the

completion of the 500 gallon per day prototype, we will begin design and analysis of the I

0,000 gallon per day prototype.

We will continue research directed at improved efficiency. So far, we have identified

four potential improvements to OPTR technology and three potential improvements to TAD

technology. lnertance and tapered pulse tubes (discussed above) are the first two of these

that we have completed. Each of these seven improvements can potentially contribute

about a 20% increase in system efficiency; hence, if all of them worked, this would

represent a (1.2)7 = 3-fold improvement in TADOPTR efficiency (i.e. the 500 gpd target of

burn 30% would improve to burn about 10%), which would imply an acoustic liquefier

efficiency comparable to that of the best existing large-scale conventional LNG plants. That

is probably too optimistic, but we expect that most of the seven potential improvements will

indeed succeed.

Acknowledgments

We are grateful to the Los Alamos National Laboratory Program Contracting Officer's

Representative, Rod Malone at Morgantown, West Virginia, for his continued

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127

encouragement. DOE Fossil Energy's financial support for this project began in March

1995.

Important technical support has been provided by Dr. Ray Radebaugh, NIST, Boulder

CO, and by Gene Zwick, Zwick Energy Research, Huntington Beach CA.

References

[1] John McDermott, Liquefied Natural Gas Technology. Noyes Data Corporation, Park

ridge, NJ, 1973.

[2] G. W. Swift, R. A. Radebaugh. Acoustic Cryocooler, September 4, 1990. U.S. Patent

number 4,953,366.

[3] A computer animation and short description of the essential thermodynamic and

acoustic processed on the TADOPTR can be obtained from Greg Swift or via Internet

at http://roft.esa.lani.gov by selecting "Educational demonstrations".

[4] R. Radebaugh, K. M. McDermott, G. W. Swift and R. A. Martin. Development of a

thermoacoustically driven orifice pulse tube refrigerator. In Proceedings of the

Interagency Meeting on Cryocoolers, page 205. October 24, 1990, Plymouth, MA,

David Taylor Research Center, publication 91/003, Bethesda, MD, 1990.

[5] G. Walker. Cryocoolers. Plenum, New York, 1983.

[6] W. E. Gifford and R. C. Longsworth. Pulse Tube Refrigeration. Trans. ASME, J. Eng.

Ind., 86:264-270,1964.

[7] R. Radebaugh. A Review of Pulse Tube Refrigeration. Adv. Cryogenic Eng., 35:1191-

1205, 1990.

[8] G. W. Swift. Thermoacoustic Engines. J. Accost. Soc. Am., 84:1145-1180, 1988.

[9] G. W. Swift. Thermoacoustic Engines and Refrigerators. Physics Today, pages 22- 28.

8

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Appendix 7: CRYENCO/Chart Industries

129

Chart Industries

Other Chart Industries Companies

ALTEC International

Greenville Tube Corporation

Process Systems International, Inc

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130

.

Process Engineering

CVI

Chart-Marston

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ABOUT PROCESS ENGINEERING

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Our Facilities:

Our 200,000 square foot, Plaistow, NH facility is divided into five main fabrication bays:

Bay A is used to fabricate the inner and outer cryogenic tank sub-assemblies;

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At PEI we have extensive ability and experience in producing the highest quality welds on a wide variety ofmaterials, using state of the art welding techniques. We maintain and continually upgrade our welderqualifications in accordance with Section IX of the ASME Code. A variety of non-destructive weld examinationmethods are used throughout the fabrication of your tank, including radiography.

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Finished tanks are shipped from our plant to your facility by either truck, rail or water service. Our on-site railsidings make rail shipping particularly desirable for large tanks. Local rail service is provided by Springfield

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Process Engineering offers state of the art cryogenic tanks made to the highest quality standards. We strivecontinually to offer these products to the market at the best possible pricing and delivery, all while maintaininga superior level of quality and functionality. Our superior design and workmanship provide you with acryogenic tank which is rugged, durable, easy to operate and maintain, and which you will be proud to own.

Our facilities in Plaistow, NH are certified by the ASME Code, the National Board of Boiler and PressureVessel Inspectors, and the Association of American Railroads Tank Car and Quality Assurance Committees.Our ASME 'U' stamp authorizes us to stamp vessels that we design, fabricate and test in accordance withSection VIII of the ASME Boiler and Pressure Vessel Code.

We are registered with the US Department of Transportation (DOT) for building cargo tanks (highwaytrailers) for cryogenic products and hazardous materials and have worked with the DOT extensively on bothhighway and rail car projects involving cryogenic products and hazardous materials.

At Process Engineering, our mission is "To Exceed Our Customers' Expectations of Quality, Value andSuperior Service." We cut no corners in our efforts to comply with both the letter and the spirit of allapplicable regulatory and customer requirements, to provide you, our customer, with safe, economical anddurable cryogenic tanks for your cryogenic liquid storage and transportation needs.

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Multi-Core Assemblies, Core-In-Kettle® Heat Exchangers, Cold Boxes, Additional ALTEC RelatedProducts

ALTEC International is an active member of The Brazed Aluminum Plate-Fin HeatExchanger Manufacturers' Association (ALPEMA).

ALTEC Heat Exchanger's Basic ConstructionThis sketch shows the basic componentsand operation of a brazedaluminum heat exchanger(BAHX). The BAHX is shown inthe horizontal orientation fordescriptive purposes only andwill actually be mounted in thevertical position from the supportangles on each side of theexchanger. The cut-away viewillustrates the warm end or top ofthe exchanger with one warmstream ("A") entering and two

cold streams ("B" & "C") leaving.

Stream "A" enters the exchanger through the nozzle and header and is introduced to theexchanger block at the port. After flowing through the port, stream "A" is directed acrossthe width of the exchanger by means of the distributor fin. Good distribution of flow isneeded for proper thermal and hydraulic performance of the exchanger. Stream "A" thenenters the heat transfer fin section. Heat transfer fins are selected by ALTEC engineersto create an optimum balance between pressure drop and heat transfer performance ofeach stream. The heat transfer fin enhances the stream flow characteristics in order totransfer heat across the primary heat transfer surface, the parting sheet. Parting sheetsseparate each individual layer and provide the surface for all piece parts (bars and fins)to braze together when placed in ALTEC's brazing furnace. Flow continues through theheat transfer fin then through the outlet distributor fin, port, header and nozzle.

The design and construction of BAHXs allow an infinite number of designconfigurations considering the exchanger's size, geometry, number of streams, types offins, etc. ALTEC is confident that we are able to meet any requirement specified for aBAHX application.

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ALTEC strives to provide their worldwide listof customers with the lowest evaluated cost

solutions to heat transfer needs.

ALTEC Heat Exchanger CoresALTEC heat exchangers aremanufactured to rigorous quality standards as well as therequirements of the American Society of MechanicalEngineers (ASME) code for unfired pressure vessels.ALTEC is a registered ISO 9001 company that designs and

manufactures exchangers to most other internationally recognized pressure vessel codes.

ALTEC manufactures block sizes that are among the largest in the industry. Pressureratings range from full vacuum up to 1751 psig (121.7 bar G) at design temperatures of-452°F (-269°C) to +400°F (+204°C). The company has manufactured hundreds ofbrazed aluminum heat exchangers rated for pressures of 1000 psig (69 bar G) and above.

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ALTEC Global Heat Transfer Solutions

ALTEC International was formed in 1985 through an acquisition from The TraneCompany's brazed aluminum heat exchanger operation in La Crosse, Wisconsin.ALTEC International was founded in 1949 and is a wholly owned subsidiary of ChartIndustries, of Mayfield Heights, Ohio. ALTEC heat exchangers offer numerousadvantages over other heat transfer equipment.

Lower Operating Temperatures

ALTEC heat exchangers are well suited for the low temperature requirements ofcryogenic applications since the 100% aluminum construction can withstandtemperatures as low as -452°F (-269°C) and pressures as high as 1751 psig (121.7 barG).

Lower Capital Costs

ALTEC brazed aluminum heat exchangers are compact and lightweight. ALTECexchangers provide 300 to 450 square feet of heat transfer surface per cubic foot ofexchanger volume (1000 to 1500 m²/m³) which is six to ten times higher than that of acomparable shell-and-tube heat exchanger. This characteristic, coupled with theenhanced heat transfer performance of plate-fin construction, produces as much as ten to20 times greater heat transfer performance (UA) than shell-and-tube exchangers of equalsize. This higher efficiency can correlate to an ALTEC heat exchanger costingapproximately 25-50% less and weighing 95% less than a stainless steel shell-and-tubeexchanger.

Flexible Design

ALTEC heat exchangers can be designed with more than ten streams and nearly anunlimited number of configurations by varying parameters such as block size and shape,fin type, layer stacking arrangement and flow scheme. This multiple stream advantage isrealized in the potential of combining numerous heat exchanger services into a singlecompact heat exchanger.

Lower Installation and Operating Costs

ALTEC's multi-stream design can result in significant cost reduction in:

Engineering Insulation Support systems Installation Testing Documentation

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Transportation Plot plan requirements

Additionally, ALTEC heat exchangers allow temperature approaches as low as 2°F(1°C) that result in lower compressor horsepower requirements and lower plantoperating costs.

ALTEC Heat Transfer Fins

ALTEC design and engineering teams constantly challenge the variables in heatexchanger fin design, analysis and testing. Heat transfer fins are experimentally testedfor both heat transfer and pressure drop performance and cover a wide range ofcharacteristics. The company has developed improved heat transfer and fluid flowperformance correlations for both single-phase and two-phase fluids.

Straight Fin Serrated Fin Perforated Fin

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Welcome to ALTECInternational, theoriginator and worldleader in the designand manufacture ofbrazed aluminum heatexchangers forcryogenicapplications. ALTECpioneered theapplication of brazedaluminum in the airseparation industryback in 1949. Today,thousands of ALTECheat exchangers areused for a widevariety of applicationsserving the chemicaland process industriesworldwide.

Typical ALTEC applications include:

Air separation Petrochemical Natural gas processing LNG Helium liquefaction and recovery Off-shore gas processing Large refrigeration systems Synthetic fuel (i.e., coal gasification) Ethylene Hydrogen recovery Nitrogen rejection MTBE

Click here to view detailed plant types and applicationsPlease click on ALTEC Advantages and Products for an extensive review of whyALTEC brazed aluminum heat exchangers outperform carbon or stainless steelshell-and-tube heat exchangers in the ability to achieve low operating temperatures,greater efficiencies, lower capital and operating costs, and a more compact size.

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Appendix 8: Price Quote on Cooling Towers

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Appendix 9: Financial Estimates for Project Appendix 9 contains company proprietary information which is not reprinted in this public document.

Appendix 10: Marketing Strategy Appendix 10 contains company proprietary information which is not reprinted in this public document.

Appendix 11: Identification and Quantification of Potential Market for LNG for Transportation Fuel in the Morgantown, West Virginia Area Appendix 11 contains company proprietary information which is not reprinted in this public document.